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#1768920 - 12/19/12 06:34 PM What is considered Lost or Stolen?
TruthNTime Offline
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Texas
My second question in as many days is about the definition of a lost or stolen card, and the definition of a 'statement'. I have a member who reported being in the hospital for a couple of months; her claim is concerning ATM withdrawals for a total of $600.00. She says she noticed at least one of the charges (an ATM she had never used) back in early September before going in the hospital. She was in a restaurant with her daughter and home health aide, her daughter logged into home banking on her cell and they found the error. She suspected it could be the home health aide, but said she waited for her statement to review it further; but she ended up in the hospital before her statement came. Here is where I need clarification: If she suspected her home health aide back in September and saw local ATM transactions that she did not make, would that make the card lost or stolen even though it was in her possession (aide removed and replaced the card)? Also, since the member saw the transaction and knew it was not hers on home banking, would she still have 60 days past the end of that current statement cycle to advise us of the error? It seems like after she saw the first error in Home Banking it would be her responsibility for every error past the first, because she did not have to wait on a 'statement'. Is home banking considered a 'statement'?
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Robert R.
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#1768968 - 12/19/12 07:26 PM Re: What is considered Lost or Stolen? TruthNTime
John Burnett Offline
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Sorry. Home banking access does not a statement make. When Congress wrote the law, it didn't have home banking services, and neither Congress nor regulators have seen fit to alter the wording.
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#1768981 - 12/19/12 07:54 PM Re: What is considered Lost or Stolen? TruthNTime
TruthNTime Offline
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Thanks John, any input on this being considered a lost or stolen card? She saw the error and suspected her home health aide, but did not report the error from home banking (she knew someone had to have been in possession of the card, lost/stolen). If she had reported the error then each consecutive withdrawal would have been prevented. Congress and regulators might want to reconsider each sides responsibilities and liability at some point smile
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Robert R.
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#1769099 - 12/19/12 11:01 PM Re: What is considered Lost or Stolen? TruthNTime
Andy_Z Offline
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A couple observations - if she was in the hospital for months, her bill will be such that $600 is meaningless and the hospital and insurance will want that back many times over. Sorry - a rant there. smile

The discrepancy was noted, she wanted to wait for her statement, but ended up in the hospital. What was the time between learning of the loss and going into the hospital?

Is the daughter on the account with her?

Does she say her access device was lost or stolen? What was used for the debit? Her card is one thing, a skimmed card is another. An aide taking it, using it and replacing it is lost or stolen. The meaning is largely that you'd find in Webster's.
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#1769289 - 12/20/12 04:18 PM Re: What is considered Lost or Stolen? TruthNTime
TruthNTime Offline
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She was unable to tell me exactly when she saw the charge, but said it was before she was in the hospital.

The daughter is not on her account.

She says the home health aide must have been sneaking the card in and out of her purse, the first charge was August 21 2012, the last was on September 19 2012. The card was not skimmed (99.9% certain). She did mention that she allowed the aide to use her card for a purchase at the drug store, but the PIN was never given to her; evergreen possibility?

I feel bad for our member, but she did not take care of her responsibilities as far as I cam concernced.
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Robert R.
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#1769291 - 12/20/12 04:18 PM Re: What is considered Lost or Stolen? TruthNTime
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I did not mind the rant by the way, I churn out at least 3 or 4 a day! LOL
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Robert R.
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#1769458 - 12/20/12 07:39 PM Re: What is considered Lost or Stolen? TruthNTime
Andy_Z Offline
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I hate when bankers use the term evergreen and believe that once the card is given with the PIN, that person has the right to use it forever. It doesn't work that way. Read further in the definitions and you'll see that fraud overwrites this. If the person got their card back, and the aide stole it, used it and replaced it, that is theft or fraud and is unauthorized.

Consider that if I write my PIN on my card and lose it, everyone in the world can use my card. If they do, I have a valid claim. So why should my telling just one person and then taking my card back and putting it in my wallet leave me, the consumer, with more liability than that?
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AndyZ CRCM
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Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#1769462 - 12/20/12 07:41 PM Re: What is considered Lost or Stolen? TruthNTime
Andy_Z Offline
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FWIW this is exactly the things I'll discuss in Feb in my webinar.

http://calendar.bollearningconnect.com/main.php?view=event&eventid=1355932672493
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#1769513 - 12/20/12 08:42 PM Re: What is considered Lost or Stolen? TruthNTime
TruthNTime Offline
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Makes absolute sense, I did not think of it that way... probably because I did not want to see it that way.
Thanks again Andy.
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Robert R.
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#1801252 - 04/03/13 10:54 PM Re: What is considered Lost or Stolen? TruthNTime
C_Groat Offline
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Sorry for beating a dead horse here and resurrecting a 3 month old post, but finally just found some additional time to review the 'archives.’

On this on I agree, if she was given the card for a one time pin less transaction and later "stole" the card it should be covered and we would take. If we take the loss, we are also going to pitch that we are going to press the charges against the aide.

What I’m having a hard time around is the fine line between “fraud” and “exceeds the authority given” clause. The staff interpretation for 2(m) Authority does not indicate that authority is over once the card is given back to the consumer, but when the consumer has notified the financial institution that transfers from that person are no longer authorized. Is there any additional staff interpretations that indicates the authority ended when the card was given back to the consumer or is it just implied that authority ends when the card is returned?

What about the cases where the consumer advises the care taker/family member uses the card whenever to purchase groceries or prescriptions, taking the card from the consumer purse/wallet each time, but was not authorized to take the card and do the $500 cash advance. Was the card stolen or exceeds the authority given??

Staff interpretation for 6 (b) 2 Consumer Negligence also refers you back to 2 (m) regarding termination of the authority given by the consumer to another person, but again cannot find anything specific of when authority ceased – when the card was presented back or notification that the person is not longer authorized.

Any clarification or direction on additional staff interpretations appreciated. Thank you.

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#1801287 - 04/04/13 12:24 PM Re: What is considered Lost or Stolen? TruthNTime
John Burnett Offline
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There is nothing that I am aware of that clearly says that the authorization ends when the card is returned to the control of the cardholder. It's a common-sense assumption based on the tenor of the regulation itself, which is decidedly consumer-protection oriented. A judge and jury would have a hard time deciding the question, in my opinion, and the specific circumstances of a given case might determine which side of the argument would prevail. It's a gray area, and I am not aware of any case law (I'm sure there have been some cases decided, but none I can find) that makes the gray either lighter or darker.

Compliance officers and other bankers like black-and-white answers, I know. This issue, though, is one that remains shrouded in gray, and bankers have to decide how to handle claims based on the facts in front of them in each case.

Not the answer you're looking for, I know.
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#1801459 - 04/04/13 04:06 PM Re: What is considered Lost or Stolen? TruthNTime
Andy_Z Offline
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My discussion with FRB attorneys indicated that once the card is returned, the authority granted for a one-time transaction ended. No, I don't have that in writing and haven't read it officially, so take it for what it's worth.

Had the person taken more in the transaction that was authorized, that is exceeding authority. Taking the card after it was returned, without authority to take it, is fraud.

That is how I read it.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#1802451 - 04/08/13 06:27 PM Re: What is considered Lost or Stolen? TruthNTime
TruthNTime Offline
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Texas
I like the expanded inquiry C_Groat. The case, in this case, was that the aide was given the card from time to time, as our member requested her to buy things. Our member filed charges on the aide and wanted her arrested; she was not involved in any way (no conspiracy, no benefit), she even pushed and had the aide blacklisted in our county. The question in my mind was just what you asked; when does the authority end? Like the others said, case-by-case consideration is required in most situations. It seems the best way to approach these claims is with the 'spirit and intent' of the regulation itself at heart. One thisng is for sure, these regulations definitely goad us into 'seeing the best' in people smile
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Robert R.
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