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#2172763 - 04/10/18 04:22 PM Reg E Help, Please
RR Sarah Offline
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RR Sarah
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Posts: 2,505
Up North
Card processor calls our customer at 7:30am Sunday morning with suspected fraudulent items on his debit card. The customer is a seller on Etsy and, at the time, believed they were legitimate items. Card processor did not block the items. Seven hours later, customer called our processor back and said that yes, those items were indeed fraudulent. Now we have a bunch of items that are under $25 (it's a chip card). Do we have a leg to stand on to deny his claim since he initially said the items were not fraudulent?

Any help/opinions would be greatly appreciated. I'm thinking that we're going to be stuck with those charges under $25 but...fingers crossed?
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Operations Compliance
#2172771 - 04/10/18 04:56 PM Re: Reg E Help, Please RR Sarah
BrianC Online
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No different than if I said, "Maybe my wife did those, let me check..."

I either authorized the transactions or I didn't. Customer negligence also cannot be used to increase customer liability. If we can't investigate due to the low dollar amount of each individual transaction, then we owe the customer the money. My inability to use the chargeback process to investigation does not change the Reg E requirements. My investigation could also include contacting the merchant directly.
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#2172776 - 04/10/18 05:05 PM Re: Reg E Help, Please BrianC
RR Sarah Offline
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RR Sarah
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Thank you Brian.

And if I'm understanding correctly, since this is a debit card with a Visa logo, the customer has no liability?


Edited because I said, "Thank you Brain. smile Probably appropriate but thought I'd correct anyway.
Last edited by RR Sarah; 04/10/18 05:08 PM.
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#2172781 - 04/10/18 05:12 PM Re: Reg E Help, Please RR Sarah
BrianC Online
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Happens a lot. wink

Zero Liability would apply, yes.
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#2172789 - 04/10/18 05:44 PM Re: Reg E Help, Please BrianC
RR Sarah Offline
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RR Sarah
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Up North
Okay, the customer actually came in and met with us. The charges on his debit card are directly from Etsy. Apparently with Etsy you are supposed to keep an account where, if you are unable to fulfill customer/s orders, Etsy can debit that account to refund money to the customer. He didn't have enough in his Etsy account so they charged his debit card for the customer refunds.

In my mind, I'm thinking this is an issue between Etsy and the customer and not fraudulent activity. Am I wrong?
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#2172842 - 04/10/18 07:32 PM Re: Reg E Help, Please RR Sarah
BrianC Online
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The customer gave the merchant authorization to debit the account per the contract. I agree that this does not meet the definition of "unauthorized" and would deny the claim based on this new information. (Note if you already provided final credit you cannot reverse.)
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#2172849 - 04/10/18 07:39 PM Re: Reg E Help, Please BrianC
RR Sarah Offline
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RR Sarah
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Thanks again Brian. We haven't done anything but investigate yet, thank goodness.
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