#2203539 - 01/22/19 12:59 PM
Re: Online Account Transfer
Anonymous
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Power Poster
Joined: Sep 2010
Posts: 2,670
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I agree with Randy and others that this is not being handled well by the "risk" department. My thought in reading this was exactly what Randy said: that a Reg E "error" has already been filed by the customer and that the bank is refusing to investigate (and resolve promptly) the error.
Said another way from what Randy already said, keep in mind that 1005.11 cover a number of items, known as an "error," which is more than just an "unauthorized EFT" (which we often tend to get hung up on). I do agree that this situation is not an unauthorized EFT, but, again, 1005.11 relates to "errors" which cover more circumstances than just unauthorized EFTs.
In fact, an error under 1005.11 includes: (i) An unauthorized electronic fund transfer; (ii) An incorrect electronic fund transfer to or from the consumer's account; (iii) The omission of an electronic fund transfer from a periodic statement; (iv) A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer; (v) The consumer's receipt of an incorrect amount of money from an electronic terminal; (vi) An electronic fund transfer not identified in accordance with § 1005.9 or § 1005.10(a); or (vii) The consumer's request for documentation required by § 1005.9 or § 1005.10(a) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists under paragraphs (a)(1)(i) through (vi) of this section.
The bottom line is that since your customer requested "documentation...for..clarification concerning an electronic fund transfer," it appears you have an error subject to the error resolution timeframes of 1005.11 of Regulation E.
In addition to the liabilities Randy mentioned, you could be looking at UDAAP penalties as you (presumably) disclosed in your EFT disclosure that you would investigate "errors" in accordance to Regulation E, but you are requiring a subpoena to do so which is far above and beyond what you have disclosed (and what is permitted by law). There have been several UDAAP cases over the last few years relating to Regulation E and not investigating errors as was disclosed (see the USAA consent order and consent orders relating to requiring a police report).
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Adam Witmer, CRCM All statements are my opinion, not those of my employer, and should not be taken as legal advice. www.compliancecohort.com
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