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#2036731 - 09/01/15 08:59 PM Reg E. - Unauthorized Transaction Liability
ULBanker2525 Offline
New Poster
Joined: Jul 2010
Posts: 8
I need some guidance here:

The scenario is - A customer sent in a dispute last week (late Aug) claiming that back in Jan. of this year they were getting their computer fixed and that the company processed the transaction without the customer's authorization. The total was $100 for this transaction. This scenario occured again in March with a separate company and the total was again $100.

Am I correct in that since the customer missed the required timeframes for reporting either of these disputed transactions that the customer is liable for the full $200 and the Bank does not need to provide credit?


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#2036755 - 09/02/15 12:54 AM Re: Reg E. - Unauthorized Transaction Liability ULBanker2525
BrianC Offline
Power Poster
Joined: Nov 2004
Posts: 6,232
A careful reading of 1005.6(b)(3) notes that the unlimited liability tier begins 60 days after the delivery of the statement that contains the first unauthorized charge. We do not get to take the date of notice in August and count backwards 60 days.

Since the customer notice of unauthorized transactions is not timely, we do not have to comply with 1005.11, which means we do not have to provide provisional credit and we do not have to complete our investigation in 90 days. However, 1005.6 says that we still have to calculate what our liability is versus the cardholder's liability. If the transactions are truly fraudulent, the customer would be liable for unauthorized charges more than 60 days from the date of the January statement. If the March charge is within this time frame, the bank may be liable for both charges if they are truly unauthorized.

The question that we should be asking is, "Are these transactions truly unauthorized?" The cardholder states that these online companies were repairing the computer, but then the charges for the services provided are unauthorized? This doesn't quite add up for me. If the cardholder contracted with for the service, but is now dissatisfied with the outcome, these would not be unauthorized transactions. Reg E does not cover buyer's remorse. More information about the nature of the claim may shed some additional light on this investigation.
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