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#2252066 - 04/08/21 08:24 PM Debit Card frau claimed - turned out to be husband
Tricia Offline
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Joined: May 2004
Posts: 458
Smack dab in the middle of IL
A customer claims fraud on her debit card. We take the appropriate steps with our debit card processor to try and recoup the loss. Come to find out, the transaction was completed by her husband (and obviously authorized). So, we processed this fraud claim and incurred fees from our debit card processor in the process. Can we charge the customer a fee for processing a false claim or it this just a cost of doing business?
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#2252092 - 04/09/21 01:58 PM Re: Debit Card frau claimed - turned out to be husband Tricia
Valley girl Offline
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Joined: Aug 2014
Posts: 279
TX
Unfortunately you cannot pass on any costs incurred in the process.

Per 1005.11:

3. Charges for error resolution. If a billing error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to any aspect of the error-resolution process (including charges for documentation or investigation). Since the Act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the good-faith assertion of errors that might result if charges are assessed when no billing error has occurred.

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#2252117 - 04/09/21 04:51 PM Re: Debit Card frau claimed - turned out to be husband Tricia
RockChucker, CAMS Offline
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Joined: Jul 2013
Posts: 1,553
The Country
What you can do is remove the customers privilege to have a debit card or close out the relationship if so desired.
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#2252119 - 04/09/21 05:21 PM Re: Debit Card frau claimed - turned out to be husband Tricia
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,010
Dallas, TX
Originally Posted by Tricia
A customer claims fraud on her debit card. We take the appropriate steps with our debit card processor to try and recoup the loss. Come to find out, the transaction was completed by her husband (and obviously authorized). So, we processed this fraud claim and incurred fees from our debit card processor in the process. Can we charge the customer a fee for processing a false claim or it this just a cost of doing business?

How is it "obvious?"

Could the couple be separated or going through a divorce?

What if it weren't the spouse? What if it was a kid? Grandchild? Roommate?

Residing at the same address means nothing.
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#2252120 - 04/09/21 05:24 PM Re: Debit Card frau claimed - turned out to be husband Valley girl
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,010
Dallas, TX
Originally Posted by Valley girl
Unfortunately you cannot pass on any costs incurred in the process.

Per 1005.11:

3. Charges for error resolution. If a billing error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to any aspect of the error-resolution process (including charges for documentation or investigation). Since the Act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the good-faith assertion of errors that might result if charges are assessed when no billing error has occurred.

Not that it's recommended (as trying to prove it was not asserted in "good-faith" may prove more difficult than it's worth), but if no error occurred, I would suggest you are at liberty to assess a fee.
Last edited by M Cockrell; 04/09/21 05:33 PM. Reason: added clarifying comment
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#2252131 - 04/09/21 08:17 PM Re: Debit Card frau claimed - turned out to be husband Tricia
Valley girl Offline
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Joined: Aug 2014
Posts: 279
TX
I can't tell you the number of times we've taken a dispute as unauthorized and when I call them back to tell them we've had a resolution thru the dispute system and the merchant has conclusive evidence of a relationship or sale with them that the cardholder will tell that they "tried to call the merchant, but they were on hold and they just didn't want to wait."

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#2252133 - 04/09/21 08:19 PM Re: Debit Card frau claimed - turned out to be husband Valley girl
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,010
Dallas, TX
I know it's frustrating, but that's irrelevant. (No offence intended.)

It's a cost of doing business.

If it makes any difference, that would support the dispute was NOT submitted in good-faith.
Last edited by M Cockrell; 04/09/21 08:21 PM. Reason: added statement
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#2253097 - 04/28/21 01:15 PM Re: Debit Card frau claimed - turned out to be husband Tricia
TINKerBell Offline
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TINKerBell
Joined: Nov 2006
Posts: 3,230
Tiger's Den!
Taking this one step further: If a customer files a fraudulent claim and admits to it, do we have to accept another claim from said customer? I believe we are going to close the account, but there is another claim for a merchant that the customer used previously on many occasions and not states that the most recent charges were unauthorized. I do not believe there is guidance in Reg. E for this. Thoughts?
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#2253101 - 04/28/21 01:44 PM Re: Debit Card frau claimed - turned out to be husband Tricia
Valley girl Offline
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Joined: Aug 2014
Posts: 279
TX
Thank you M Cockrell! You've given me a lot to think about.

Tinkerbell - we would accept the claim and investigate, but with a jaded eye knowing that potentially it is not an unauthorized transaction.

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#2253102 - 04/28/21 01:55 PM Re: Debit Card frau claimed - turned out to be husband TINKerBell
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,010
Dallas, TX
Originally Posted by TINKerBell
Taking this one step further: If a customer files a fraudulent claim and admits to it, do we have to accept another claim from said customer? I believe we are going to close the account, but there is another claim for a merchant that the customer used previously on many occasions and not states that the most recent charges were unauthorized. I do not believe there is guidance in Reg. E for this. Thoughts?
Just because a prior claim was fraudulent doesn't automatically mean future disputes would also be.

Each dispute has to be taken on its own merit.

If, however, a client is continuously presenting claims (fraudulent or legitimate), Management needs to make a decision about the risks associated with that customer having a card.
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#2253162 - 04/28/21 08:34 PM Re: Debit Card frau claimed - turned out to be husband M Cockrell
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,235
Cape Cod
Originally Posted by M Cockrell
[quote=TINKerBell]

If, however, a client is continuously presenting claims (fraudulent or legitimate), Management needs to make a decision about the risks associated with that customer having a card.

... or an account with your bank.
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