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#2265451 - 01/28/22 08:32 PM Re: Authorized or Not? 1995Banker
rainman Online
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Thank you for sharing this Compliance NABW.
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#2265459 - 01/28/22 09:46 PM Re: Authorized or Not? 1995Banker
rlcarey Offline
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Thanks for following back up.
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#2265463 - 01/28/22 10:39 PM Re: Authorized or Not? 1995Banker
Andy_Z Offline
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Unfortunately I can almost hear the discussion in the CFPB halls, "hey guys, on the next FAQs, how about this interpretation of initiating a transfer and fraud...". It'll be up there with "an ACH agreement is not an agreement but a debit card common bond is."

Thanks for the follow-up. This thread was an interesting read.
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#2265472 - 01/29/22 02:37 PM Re: Authorized or Not? Andy_Z
Compliance NABW Offline
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Originally Posted by Andy_Z
Unfortunately I can almost hear the discussion in the CFPB halls, "hey guys, on the next FAQs, how about this interpretation of initiating a transfer and fraud...". It'll be up there with "an ACH agreement is not an agreement but a debit card common bond is."

Thanks for the follow-up. This thread was an interesting read.

smile smile smile

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#2266208 - 02/11/22 05:52 PM Re: Authorized or Not? 1995Banker
TaraSue Offline
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Here's a take on this that I haven't seen yet: Customer gets a call saying his wife's info has been compromised on Amazon. They tell him to send $2,500 through CashApp (to "his wife" with the information they give him) Our transaction limit is $1,000 so the transaction failed. Customer called, we tell him the limit is 1K, but as we are talking we realize it is a scam. We tell the customer this is a scam, do NOT send these people anything. He gets frustrated with the banker, is transferred to the manager who tells him the same thing. Manager goes in to shut down his card since he is still insistent this isn't fraud and, as she looks at the screen (before closing the card) a $1,000 transaction comes through. Does Reg E apply?

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#2266209 - 02/11/22 05:54 PM Re: Authorized or Not? 1995Banker
BrianC Offline
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It depends. Did the customer initiate the transfer or did the customer get tricked into giving their access device to the fraudsters and the fraudsters initiate the transfer?

Reg E applies to the latter, but not to the former.
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#2266210 - 02/11/22 05:55 PM Re: Authorized or Not? 1995Banker
rlcarey Offline
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Does it apply how? Did they authorize a transaction for $1,000. If they did, it is an authorized transaction.
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#2266211 - 02/11/22 05:58 PM Re: Authorized or Not? 1995Banker
TaraSue Offline
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Customer initiated the transfer. My bigger question (that may be irrelevant) is that we TOLD him it was fraud and he initiated anyway. If, since he initiated, Reg E doesn't apply anyway, then the fact that we TOLD him it was fraud and he kept going really doesn't matter. Thanks for helping me walk through this.

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#2266245 - 02/11/22 09:40 PM Re: Authorized or Not? 1995Banker
RockChucker, CAMS Offline
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The Country
If we had a customer who didn't listen to us regarding the transaction, sent the money anyways and then submitted a claim they would soon be an ex-customer.
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#2266250 - 02/11/22 10:04 PM Re: Authorized or Not? 1995Banker
Andy_Z Offline
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From the description the scammer didn't get the info and initiate the transfer. The customer initiated the transfer and was informed it was a scam. They chose to send the funds. The transfer was executed as requested by the consumer.

It is different if they coerced the consumer for access info or billed more than was authorized. That was not the case. I'd deny it and not reissue. My fear is once they know the rules, they will be more likely to abuse them.
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#2269565 - 04/22/22 08:27 PM Re: Authorized or Not? 1995Banker
Compliance NABW Offline
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Interesting FDIC Supervisory Highlights on some of what we discussed here. They are taking a broad view of scam fraud as it relates to obtaining credentials/access devices. They still have not "jumped" yet to the debit card itself, but another thing to take note of is that with P2P transactions, they seem to be putting the onus on the depository institution and the app provider, i.e. Zelle, CashApp, etc. They say Error Resolution under Reg. E is the responsibility of both. Maybe they are only talking about the limited requirements of 1005.14(c), but they don't really seem to be restricting it to that.

https://www.fdic.gov/regulations/ex...s/documents/ccs-highlights-march2022.pdf

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#2269600 - 04/25/22 07:39 PM Re: Authorized or Not? 1995Banker
rainman Online
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Here's their reason for not restricting it to 1005.14(c): "When an MPP 5 | Consumer Compliance Supervisory Highlights entered into an agreement with a consumer, that agreement extended to the financial institution holding the consumer’s account."

Really?
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#2269714 - 04/27/22 06:13 PM Re: Authorized or Not? 1995Banker
Compliance NABW Offline
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Yeah, it doesn't seem to be in line with the Regulation. My understanding is it depends on how the transaction works, but, if the debit card is not what is accessed with the P2P, then the 1005.14(c) "out" usually applies.

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