We have a specific Reg E scenario we would like an expert opinion on:

A customer has filed a dispute on several unauthorized APPLE.COM charges. During the conversation with the customer, they have admitted that these transactions were conducted by his 11 year old son; however, he never gave permission to use it in any way. He stated Apple has a family sharing feature they have registered for and in order for his son to have an account, a card number was needed.

Our understanding of Reg E and in previous situations, we are required to move forward with a fraud claim if the individual cardholder has never authorized that individual to use their card. However, this specific scenario, the customer is admitting that they stored his card number in an application his son has access to.

Would you be able to provide us some guidelines on if we are able to decline these disputed transactions based on providing access to an application of which their card number was stored?

They authorized tying the card to the account. What happens after that is between Apple and customer. The bank is out of the picture.

I want an Apple account the family can use.
The account must have a card.
I attach my card to the account and the users have access to make purchases.

{Thinking Pause}

Unless Apple allows the account to restrict which users have access to make purchases, I would opine that dad has allowed each user on his account to use his access device he put on the account. That is, he can say hot card my account and nothing gets paid, or pay the incoming charges because I have authorized these directly or indirectly.

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The bank cannot differentiate which charges were from which users. Dad needs to secure his card (info) if he doesn't want the Apple authorized users to be able to use his card. Then Apple gets upset, but hey, at least dad will have his money.

Reg E §1005.14 also says this is between the Dad and the Apple folks.

Reviving this... John Burnett (or anyone), can you provide other examples/scenarios where 1005.14 can be used as a basis for denying a Reg E claim? I honestly never thought of the Apple App as falling into this category but I see now it does. Trying to think of others...

Alexa device? (you need to link your amazon account which could be linked to your debit card for payments)

Checkfree?

others?

Follow the rule to determine which applies. Here is an excerpt from my Reg E webinar materials:

Knowing when these rules will displace the Reg E investigation to a third party is important. Answer this tree of questions regarding disputing a preauthorized transfer that is not ACH:

1. Has the initiating party provided the customer an access device that the customer used for the transfer?
---a. Yes - Does that party have an EFT agreement with the bank?
-------i. Yes - The bank is responsible for the dispute. (think Zelle and the like)
-------ii. No - The initiating party is responsible for the dispute.

---b. No - The initiating party does not qualify for 1005.14 dispute responsibilities and the dispute itself does not satisfy the bank's dispute resolution requirements under 1005.11 (though the customer may still try to dispute it with the bank). Basically this is a tort claim.

I have a Vudu account which requires a payment card attached to it. I store all the digital copies of the movies I've bought so everyone in the family has access to them. Unfortunately Vudu also sells and rents other movies which anyone using the account can rent or purchase. The card I have tied to the Vudu account I keep locked so no purchases go through. I get an email, maybe every week to 10 days that a purchase did not go through. Vudu is very difficult to deal with when trying to get a refund for a purchase made in error.

A customer is disputing Apple transactions that they did not authorize. We found out that these transactions being disputed are linked to their apple account - they do have other Apple transactions that were authorized. They are In-App purchases which require a password. Do we need to provide provisional credit and investigate? Is knowing that these transactions are linked to the account enough information to deny the request?

Thank You

We listened to the REG E webinar last week and have a question on 1005.14 (page 32 of the webinar materials). Below is the excerpt from the webinar materials:

"Many providers have logon credentials which constitute an access device. This section then applies when 1. the service provider offers EFT services and 2. The provider does not have an agreement with the bank who holds the account tin question. The best way I have found to determine if this section applies is to look at the user agreement/Terms and Conditions that the consumer agrees to when signing up for the service."

There is also an example of PayPal's User Agreement with error resolution notice. So if PayPal, Zelle, Venmo have a user agreement with the customer (not with the bank), it's not a REG E claim and we can deny it because it's between the third party and the customer, correct? But what about VISA? Does Visa require us to accept these claims? or can we deny it under both REG E and VISA?

Thank You

Do other banks ever deny a non-REG E but Visa claim? When can we tell customer they can't dispute it even if it's with Visa?

If Visa provides additional protections to the consumer (for example in cases where merchandise is not received, services not rendered, merchandise not as described, etc.) you can require that the cardholder satisfy all of the Visa requirements prior to exercising a chageback right, but you violate your agreement with Visa if you refuse to help.

VISA Operating Rule 11.1.2 Issuer Responsibilities to Cardholders for Dispute Resolution

An Issuer must resolve Cardholder disputes under the Visa Rules by extending to Cardholders all protections provided on any Visa Card under applicable laws or regulations and by utilizing the Issuer’s customary practices to resolve Cardholder disputes, regardless of which type of Visa Card was used. Thus, the resolution of such Cardholder disputes will be the same in similar
circumstances regardless of which type of Visa Card was used. The foregoing applies only with respect to Transactions on Cards using the Visa Brand Mark, not to Transactions using any other payment card brand even if such brand is on the Visa Card.

So regarding my question above about the PayPal agreement, it will not be REG E but we still have to follow VISA and investigate it, correct?

Are sections11.6 through 11.10 of the Visa Operating Rules the only categories that provide the consumer protections?

Where can I find a list of the Visa chargeback reasons that we are allowed to use? If we don't have chargeback rights, the customer needs to get it resolved with the merchant and not with us?

Thank You