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#2236104 - 05/04/20 06:11 PM Reg E Fraud Dispute Scenario - Application Access
racingtofriday Offline
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Joined: Nov 2014
Posts: 17
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?

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#2236105 - 05/04/20 06:23 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
rlcarey Online
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rlcarey
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Galveston, TX
They authorized tying the card to the account. What happens after that is between Apple and customer. The bank is out of the picture.
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#2236129 - 05/04/20 08:31 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
Andy_Z Offline
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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.

---
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.
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AndyZ CRCM
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#2236255 - 05/06/20 06:03 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
John Burnett Offline
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John Burnett
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Cape Cod
Reg E ยง1005.14 also says this is between the Dad and the Apple folks.
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#2246576 - 12/16/20 12:01 AM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
happyauditor Offline
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happyauditor
Joined: Nov 2004
Posts: 804
NY
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?
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#2246746 - 12/18/20 07:56 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
Andy_Z Offline
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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.
Last edited by Andy_Z; 12/18/20 08:00 PM.
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AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#2246778 - 12/21/20 05:42 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
madukes Offline
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madukes
Joined: Jul 2009
Posts: 1,418
Flyers Country
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.

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#2251287 - 03/26/21 02:08 PM Re: Reg E Fraud Dispute Scenario - Application Access racingtofriday
banker-12 Offline
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Joined: May 2007
Posts: 1,165
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

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