Thread Options
#2246100 - 12/02/20 11:32 PM Reg E - Customer Gave out card information
ALW Offline
Joined: Dec 2014
Posts: 94
If a customer received a phone call from a "spoofed" caller ID and it appeared as though our bank was calling to confirm fraudulent charges, and the customer subsequently gave out her card number, CVV, and expiration date to have the caller "refund the $500 unauthorized charge" however, what ended up happening is the suspect charged $1,000 to the debit card.

The customer called the bank 2 hours after the event occurred to inquire if the refund had been processed and that's when we realized what had happened.

Is this covered under reg e - and we owe her the $1,000? Or because she gave out the card information willingly without realizing it was a scam, is this the customer's to bear?

Obviously, if it's not covered under Reg E the bank needs to weigh the reputational risk of the situation.


Return to Top
eBanking / Technology
#2246101 - 12/02/20 11:39 PM Re: Reg E - Customer Gave out card information ALW
rlcarey Offline
10K Club
Joined: Jul 2001
Posts: 75,540
Galveston, TX
The customer authorized a refund and not a charge to their account. I am not sure how you can call that an authorized transaction.
The opinions expressed here should not be construed to be those of my employer:

Return to Top
#2246102 - 12/03/20 03:53 AM Re: Reg E - Customer Gave out card information ALW
BrianC Online
Power Poster
Joined: Nov 2004
Posts: 5,806
That definitely qualifies as "access device obtained through robbery or fraud" as noted in the commentary to 1005.2(m).

Reg E covers it and the bank owes the customer the money. The bank also has to decide if it wants to issue a replacement card.
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!

Return to Top
#2246112 - 12/03/20 02:30 PM Re: Reg E - Customer Gave out card information ALW
ALW Offline
Joined: Dec 2014
Posts: 94
Thank you both very much!

Return to Top
#2246196 - 12/04/20 07:27 PM Re: Reg E - Customer Gave out card information ALW
Andy_Z Offline
10K Club
Joined: Oct 2000
Posts: 27,196
On the Net
Another way of looking at this is, if your customer gave the info to a "scammer" who said they'd remove a virus from the consumers PC for $300, and they logged on to that persons PC and did little or nothing that we know of, the card info was provided for a service to be rendered and arguably it was, even if it was a scam or appeared to be after the fact. We've no idea what real service was performed. Sometimes these are to clean a virus, and maintain the PC with driver updates and such. It is a scam, but legally it may not be.

There used to be a scam for tree trimming. A person would agree to $1.00 a branch. Well a branch can be a big limb where 10 make a tree much thinner. But cutting those 10 limbs piece by piece could lead to 50 "branches" on what the homeowner saw as one. It's a scam, but it's one to be decided on in the courts.

But if that tech person in the original scenario then made additional charges, those additionals were not authorized and there was no agreement. Those would be valid claims as they were not authorized.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

Return to Top

Moderator:  Andy_Z