I have a customer who visited a branch on 8/3 to dispute a charge with the bank with his debit card. He informed us his ex-wife/girlfriend had stolen his card and made a purchase to a local utility company for a bill. He also informed us that two charges on 5/1 were also unauthorized. We are unsure when he first noticed these charges in May and I'm working on fishing that side of the story out. He may not have reported them in time to us based on his statement cycle. The 60 day window expired July 9th.

To further complicate this situation, this same customer was in a branch on 5/3/18 to dispute another charge on his previous debit card. We closed that card and completed our investigation into that charge/claim. The card we closed in May is also the same card that the customer is now disputing the charges from 5/1 on.

I have reason to believe that the customer saw and was aware of the charges on when he was in a branch on 5/3. I'd like to deny his claim, but am thinking that the Reg rules otherwise. My team and I are thinking this is a claim we may refund. Can someone chime in validate our thoughts?

The 60 day rule applies to transactions that occur AFTER the 60 period expires; it does not apply to transactions that occurred before then.

The $500 liability rule applies to transactions that occur more than 2 business days after he becomes aware of the loss or theft of his access device (if he doesn't inform the bank before then). The fact that he might have known about these charges on 5/3 when he reported them is not relevant to the Reg. E timeline rules. On the other hand, it might be evidence that at least at that time he did not consider the charges to be unauthorized.

Also, you mention that it was his ex-wife or girlfriend that initiated the charges for the utility bill. Was this a bill that he was obligated to pay anyway? If so, it's not unauthorized for Reg. E purposes because he benefited from the charge (it paid an obligation that he owed).

At some point, if these are utility bill-sized charges, you have to ask yourself it is worth all the time and effort to track these facts down instead of just making the reimbursement.

Rainmain, He's not providing information regarding the utility bill being his or not. I know from prior attempts, this specific utility company will not work with the bank, thus crippling our investigation.

Honestly, we are certain we will be refunding these three charges (two from May, one from last week). These aren't normal utility bill sized charges. I believe there is some past-due activity on their end.

Is the May activity connected to the July? Why do you suspect he should have known about the May transaction if that isn't what was being discussed?

At the end of the day the requirement is on the bank to prove the consumer did the transaction, authorized it, or benefited from it. If you can't you likely will pay the claims. But that doesn't mean the bank has to issue a new debit card to the consumer, especially if the losses the bank is paying out are greater than the income generated from the account.

Oh, and rainman, I wish we had a Like button. So many bankers don't understand the unlimited liability tier but you got it.

Thanks Andy. It's easier to understand when you think about the reason for it (and that it is similar to the "repeater rule" for forged checks under UCC Article 4).