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.