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#1913888 - 04/11/14 05:55 PM Reg E Dispute
Paris Offline
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Joined: Dec 2005
Posts: 173
Honolulu HI
Yesterday a customer disputed over $5,000 in unauthorized transactions that she discovered on her August bank statement. All transactions occured only within a two day period on August.

Since she notified us within one day of discovering the unauthorized transactions is her liability $50 or since more than 60 days have past since we made the statement available, is her liability $500?

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General Discussion
#1913896 - 04/11/14 06:09 PM Re: Reg E Dispute Paris
Derwood Offline
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Joined: Nov 2009
Posts: 179
First you didn't say if the unauthorized transactions were a result of lost or stolen access device. If there isn't a lost or stolen access device involved the customer would not be liable for any of the transactions under 1005.6(b)(3).

If a lost/stolen access device was used you would need to determine when the customer became aware of the loss/theft. Note this from the official staff commentary: "2. Knowledge of loss or theft of access device. The fact that a consumer has received a periodic statement that reflects unauthorized transfers may be a factor in determining whether the consumer had knowledge of the loss or theft, but cannot be deemed to represent conclusive evidence that the consumer had such knowledge."
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#1913899 - 04/11/14 06:11 PM Re: Reg E Dispute Paris
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
The $50/$500 tiers of 1005.6 are based on when the customer "learns of the lost or theft of the access device."

Since the customer notification was not timely, the investigation requirements of 1005.11 do not apply (i.e. you do not have to provide provisional credit and you do not have to complete your investigation in 45 days.)

If the transactions are truly unauthorized, the customer liability cannot exceed $50.
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#1913906 - 04/11/14 06:24 PM Re: Reg E Dispute Paris
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
If there was no access device involved -- you didn't indicate the type of transaction in your question, Paris -- and if you determine the transactions were, in fact, not authorized by the customer (and that the customer received no benefit from them, etc.), the customer's responsibility would be $0, since you said the transactions all occurred in a two-day period.
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#1914055 - 04/12/14 12:38 AM Re: Reg E Dispute Paris
Paris Offline
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Joined: Dec 2005
Posts: 173
Honolulu HI

The $5,000 in unauthorized transactions were debit card transactions that she discovered on her August bank statement. All transactions occured only within a two day period in August in an out of state location. The customer said she had possesion of the card at all times.

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#1914157 - 04/14/14 03:28 PM Re: Reg E Dispute Paris
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
That is symptomatic of fraud through the use of "cloned" cards. It's possible her card was skimmed and the card number used to create counterfeit plastic. A counterfeit card is not an accepted access device. A customer cannot be liable for unauthorized transactions by unaccepted access devices. So IMHO, if you determine that the transactions were not hers, you eat them all.
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#1914163 - 04/14/14 03:34 PM Re: Reg E Dispute Paris
Rocky P Online
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Florida

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