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#1834605 - 07/19/13 03:40 PM budgeting for debit card write offs
reknab Offline
100 Club
Joined: Oct 2008
Posts: 249
not where I want to be
I posted this in the 'general' forum but did not receive any response...hoping someone could give me some feedback on this...

How do you all budget for debit card dispute write offs? I'm thinking of taking a percentage of the total debit card volume, but not sure what the percentage should be. Any suggestions appreciated!!

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eBanking / Technology
#1834627 - 07/19/13 04:14 PM Re: budgeting for debit card write offs reknab
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,408
Cape Cod
Your losses won't mirror those of another, differently-situated issuer. I think the best approach is to review the losses recorded over the past couple of years (minimum) and see what percentage they are of debit card volume.

If you're new at the debit card game, perhaps some suggestions from those with more battle wounds could give you a starting point, but I'd recommend doing a look-back every couple of years to see whether your guesstimates (or forecasts, if you prefer) are reasonably good, and make adjustments as needed.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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#1835198 - 07/22/13 07:04 PM Re: budgeting for debit card write offs reknab
OkLender Offline
New Poster
Joined: Dec 2011
Posts: 16
I use the bank's historical loss record plus additional. As total debit card transactions continue to increase, losses have done the same. If you budget only for the percentage of loss for the time period being considered, you will be behind the game from the beginning.

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#1836364 - 07/25/13 03:52 PM Re: budgeting for debit card write offs reknab
StacyNBS Offline
New Poster
Joined: Jan 2013
Posts: 20
I agree with the recommendation to track the historical losses as a percentage of volume. You may also want to separate that by signature vs. PIN as PIN fraud is less as a percentage vs. signature. That way if you decide to take steps to decrease fraud by channel you'll have benchmarks.

I also encourage you to share your numbers regularly with management, including the board. Just like the lenders do with loan losses. That will help mitigate a 'freak out' when a large loss has to go before the board.

I saw a bank that said '24 Hour Banking,' but I don't have that much time. ~Steven Wright

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