Currently we require our cardholders to submit errors/unauthorized transactions in writing. If we do not receive notification from the customer we just close the dispute stating no error occurred. I know reg e states we must do an investigation before we deny a claim. We currently do not. What would an investigation entail? If anyone could help that would be greatly appreciated. I do know we can submit retrieval requests but what would that prove if there a signature based transactions? Or if there are transactions (like gas stations) where we cannot retrieve footage? If anyone knows of a good webinar explaining the investigation process that would be awesome also.

Note to BOL faithful...Curious Banker did not receive any compensation from me for posting this question.

Based on your proecdures as you currently explain them, if your regulator catches you on this, there is the possibility of a UDAAP citation, CMP, and customer restitution. A careful reading of this FDIC consent order reveals a prepaid vendor that had a similar procedure.

FDIC news

As for your investigation, if your retreival request can produce a signed sales receipt, you can compare it to your cardholder's to see if it is a reasonable match or not. In those instances where this is not possible, your options are to take the loss, contact the merchant directly and ask for help with obtaining surveilance footage, or work with local law enforcement if the merchant refuses to work with you directly.

Note with gas station purchases that in your cardholder states that the card is lost/stolen, you can win a chargeback. In the event it is the result of a counterfeit card, the bank does not have chargeback rights and is liabile for the loss. VISA/MasterCard both have issuer certification forms that can be completed and signed by a bank official instead of a cardholder in order to initiate a chargeback. Check with your card processor to see if they have these available (and demand to know why not if they don't.)

As for education, I'd would be happy to have you at either of my upcoming sessions.

Reg E vs. VISA: Debit Card Dispute Resolution

Reg E vs. MasterCard: Debit Card Dispute Resolution

My first reaction was to check if this poster had their bank name in their profile. They do not. Whew!

CB27, when you take this valuable information to your bank, they will not thank you. But tell them as compliance you are not a cost center, you are profit preservation and this may have saved the bank a huge amount from avoiding a CMP.

The next question you must ask is what is your volume of claims and how many were denied sans investigation? Will the bank reopen and evaluate those claims? Have there been complaints to the bank or regulators on this topic? Essentially the liability for past sins does not end because you can start doing it right today. You need to get a handle on how many cases and $s are involved.

You also need to get the procedure changed ASAP and no, it doesn't matter that "this is the way we've always done it" and examiners never balked before. The MarkleBank said that in an interview after they were hit with an $83K CMP because they required police reports to process a claim.

Give me a little credit Kathleen I know better than that!

I knew our process was incorrect but I am just a dispute case worker. Not sure if they will listen to me but I will try.
We do not have enough staff to handle the whole "investigation" process and I believe the problem is getting approval for more people to help. This email may get the ball rolling, I hate to go over my bosses head since she already knows how I feel on this aspect but sometimes you have to do what you have to do right?? Thank you sooo much for all of your help!!

Timing -- Three banks (two in Kentucky and one in Indiana) got hit with CMPs by the FDIC in July for imposing error resolution requirements on customers that aren't provided for in the EFT Act or Regulation E, which the FDIC found to be unfair and deceptive under Section 5 of the Federal Trade Commission Act (UDAP violations). The penalties ranged from $7,500 to $100,000 (in the spirit of full disclosure, the Kentucky bank hit with the $100,000 CMP was also cited for UDAP violations in connection with self-help collections of alleged debts from individuals cashing on-us payroll checks).