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#1734088 - 08/23/12 01:41 PM Is Incarceration an Extenuating Circumstance?
dvc4me Offline
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We have a customer who was incarcerated and is now filing a Reg. E claim for unauthorized VISA activity that wiped out her checking account (using her debit card). She says that she didn't receive her statements while in prison. Statements were sent to her last address of record and were not returned as undeliverable.

We've researched these threads and have found conflicting information. One thread says that jail is not an extenuating circumstance if the customer has the ability to receive mail or otherwise be notified of transactions in the account. Another thread says that since hospitalization and travel are considered extenuating circumstances, that jail time should as well.

So...what is the conventional wisdom here? Or does it even matter since the customer is only responsible for unauthorized transfers made after the 60-day period. If the account was wiped out in the first 60 days, the customer is still only responsible for $500.

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#1734217 - 08/23/12 03:42 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
Derwood Offline
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I'll leave the question of extenuating circumstances to one of the Gurus. You did mention that is was unauthorized Visa activity. If that is the case you'd be dealing with Visa's zero liability policy which doesn't allow you to hold the cardholder responsible for any portion of the unauthorized transactions.
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#1734253 - 08/23/12 04:32 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
dvc4me Offline
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Correction - just found out that the transactions were not VISA transactions; they were ATM withdrawals. Card and PIN were left with customer's sister - sister lost the card.

Sorry about that! The story seems to change every time I turn around!

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#1734665 - 08/24/12 01:57 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
John Burnett Offline
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If the claim is that the transactions weren't authorized, you may or may not be able to impose the timing deadline under §1005.11 for filing the claim under that section. However, you still have a claim under §1005.6 to consider -- were the withdrawals authorized or not? Since you have a clue in your investigation -- the sister had "custody" of the card and PIN -- see if you can tie her to one or more of the transactions. If the sister made the withdrawals, they would not be unauthorized (see §1005.2(m)) and you can deny the claim for those transactions. If there are transactions remaining after culling out those that were not unauthorized, apply the liability limitations under §1005.6 to determine how much your customer is liable for. Since she probably doesn't have a clue as to when the card was lost, you can pretty much forget about anything in paragraphs 1005.6(b)(1) and (2). Then you'll have to decide whether and how much leeway to give her on the 60-day rule's allowance for "extenuating circumstances." As you noted, if the account was already wiped out, it really doesn't matter because there would no customer liability at all (not even $500).

There really isn't any guidance on whether incarceration qualifies as an extenuating circumstance. I imagine that a court would look for information about whether the customer had access to mail (if she could have her statements forwarded and whether they would be subject to opening and review by prison officials, for example) while on her enforced vacation.
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#1734732 - 08/24/12 03:14 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
dvc4me Offline
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Thank you - I appreciate your help!

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#1734956 - 08/24/12 07:05 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
edAudit Offline
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You are here
Was she jailed for defrauding a bank? smirk
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#1735088 - 08/24/12 09:29 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
Andy_Z Offline
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Was the statement address the sister?

I am in the camp that says if they can get mail, that is different than being in the hospital. I don't see the extension and if there was time, why wasn't her address with the bank changed?

You may end up paying a claim, but I'd attribute as much liability to the consumer as possible based on what is known here.
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#1736264 - 08/29/12 04:51 PM Re: Is Incarceration an Extenuating Circumstance? dvc4me
dvc4me Offline
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Thanks for the info!! Much appreciated!

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