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
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