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#200482 - 06/15/04 07:29 PM Reg E notification
yorockie Offline
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Sec. 205.6(b)(4) of Reg. E states that a customer must notify the bank within 60 days of the statement showing the first fraudulent transaction. If not they can be held responsible for the full amount of all fraudulent transactions going forward from the first fraudulent transaction.

My question is, does the 60 day period start from the date the original fraudulent transaction posted to the customer account? Or does it begin with the date of the statement?

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#200483 - 06/15/04 07:35 PM Re: Reg E notification
NotALawyer Offline
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I believe it is from the date the statement is received. Can anyone provide a cite either way?

Thanks!

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#200484 - 06/15/04 07:45 PM Re: Reg E notification
yorockie Offline
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My reading of the Reg. led me to the same conclusion, but we got into a discussion here at the office. Thanks for your response.

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#200485 - 06/15/04 09:47 PM Re: Reg E notification
Anonymous
Unregistered

Quote:

I believe it is from the date the statement is received. Can anyone provide a cite either way?




Actually, it's from when the statement was SENT. The Reg E Commentary to paragraph 6(b)(3) states:

If a periodic statement shows an unauthorized transfer made with a lost or stolen debit card, the consumer must notify the financial institution within 60 calendar days after the periodic statement was sent;

Reg E Commentary

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#200486 - 06/15/04 11:57 PM Re: Reg E notification
Andy_Z Offline
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Quote:

Sec. 205.6(b)(4) of Reg. E states that a customer must notify the bank within 60 days of the statement showing the first fraudulent transaction. If not they can be held responsible for the full amount of all fraudulent transactions going forward from the first fraudulent transaction.

My question is, does the 60 day period start from the date the original fraudulent transaction posted to the customer account? Or does it begin with the date of the statement?




As noted, you're not quoting or reading it correctly. The "subsequent transfers" 205.6(b)(3) refers to are from the statement transmittal. This is a common error. If $400 is taken from my account on May 1 and you mailed me statements on May 2 and June 2, and I saw it today and reported it today, you'd owe me $400. Liability for the early transactions doesn't increase. It keys off when I discovered the error and notified you. Had I notified you on May 3 my liability would be the same. There were no subsequent transactions you could have prevented, so my notice is moot as to that.
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#200487 - 06/29/04 02:42 PM Re: Reg E notification
Anonymous
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I'm still confused as to why we have to investigate "errors" that are reported more than 60 days after the statement goes out. I thought the customer lost their opportunity to assert any claim after that time.

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#200488 - 06/29/04 05:29 PM Re: Reg E notification
John Burnett Offline
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John Burnett
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Please compare the language in Regulation E, Section 205.6 on Consumer Liability for Unauthorized Transfers with that in Section 205.11 on Error Resolution. Both sections refer to a 60 day period, but each has a separate purpose in mind.

While it is true that a consumer's error resolution claim must be received within 60 days of delivery of the statement showing the alleged error in order to be protected by the error-resolution provisions, such is not the case with the unauthorized transfers provision in 205.6.

What 205.6 says is that the consumer must notify the bank by the 60th day following delivery of the statement showing the first unauthorized transfer in a string of connected unauthorized transfers in order to cap the consumer's liability at $0 (no access device used) or up to $500 (access device used). But the consumer is protected by 205.6 limits on liability during the first 60 days regardless of when the consumer enters the claim. If the consumer comes back to the bank 2 years after a series of unauthorized transfers hit the account, the consumer would be liable for only those transfers occurring after the end of the 60-day period, plus up to $500 of those occurring within the 60-day period if done with an access device.

Even though the consumer isn't entitled to the protections of the error resolution process (provisional credit, 10 and 45 day rules, notices, etc.), it's probably necessary for the bank to use some of the research techniques used in error resolution to determine whether the transfers in question are unauthorized.

Regulation E has no "statute of limitations" provisions on fraudulent use like the UCC does.
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#200489 - 06/29/04 09:31 PM Re: Reg E notification
Anonymous
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Thanks, John. It finally registered.

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