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#2269838 - 04/29/22 06:21 PM Online Banking logons and Reg E Dispute
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 336
TX
I have a very young member disputing concert tickets (not authorized). She averages 3 debit card transactions per day, and averages 4 online banking logons per day. On the date in question, she logged in 5 times. Our banking system shows available/actual balances whether you are logging in on the app or on our website. The IP addresses on the log-ins are the same as they were prior to the purchases. She has a finite amount of money - works part-time at a school district, so a large purchase should have been evident since her payroll posted on the day the tickets were purchased. I asked her why she hadn't noticed that she had nothing available from her payroll and she told me she never looks at balances when she logs in. She doesn't have loan with us, so the only thing to look at would be her savings and checking account balances or activity. The tickets are to a local event, and event insurance was also purchased.

Can I hold her liable on the tiers for not reporting the outage for 15 days?

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#2269839 - 04/29/22 06:28 PM Re: Online Banking logons and Reg E Dispute Valley girl
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,279
Galveston, TX
You can only hold her liable if you can prove she actually authorized the transaction. Everything you have mentioned so far has no bearing on that question. She is not claiming that her access device was stolen - correct?
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#2269851 - 04/29/22 07:10 PM Re: Online Banking logons and Reg E Dispute Valley girl
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,275
Illinois
With respect to 1005.6(b), since her dispute involves a single transaction, her liability is limited to $50 (if an access device was involved) or $0 of Mastercard/Visa Zero Liability applies. The $500 tier of 1005.6(b)(2) only applies to transactions that occur more than two business days after the customer learned of the loss/theft of the access device.

Whether the customer told you about the charge the day after it happened or told you two weeks after they saw it, there are no transactions that would fall into the $500 bucket. Reg E does not allow you to retroactively apply 1005.6(b)(2) or (b)(3) to earlier transactions.

Also, the fact that she signed into online banking may be considered in calculating liability but is not proof that she saw the transaction(s). Maybe she was looking for a specific check that cleared or a direct deposit and didn't really look at the balance. This is spelled out in the commentary to 1005.6(b).

"2. Knowledge of loss or theft of access device. The fact that a consumer has received a periodic statement that reflects unauthorized transfers may be a factor in determining whether the consumer had knowledge of the loss or theft but cannot be deemed to represent conclusive evidence that the consumer had such knowledge."
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#2269893 - 05/02/22 01:39 PM Re: Online Banking logons and Reg E Dispute Valley girl
Valley girl Offline
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Joined: Aug 2014
Posts: 336
TX
Thank you both.

No rlcarey, she is not claiming that the device was stolen. She did state that many people have access to her Ticket Master account and she was going to check with "them." I haven't received a call-back from her.

Brian - there were 3 transactions spread over 3 days (tickets, insurance, and whatever the discount ticket app does). I did not believe that I could hold her liable on the tiers so to speak, but there is no doubt in my mind that she did the transactions. She also used an ATM during this time and after the first attempt kicked as insufficient funds, she lowered her request to another sum but still never checked any further as to why she didn't have as much money as she thought (she requested $60 and scaled it back to $40 on the next attempt).

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#2269907 - 05/02/22 04:19 PM Re: Online Banking logons and Reg E Dispute Valley girl
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,275
Illinois
Quote
but there is no doubt in my mind that she did the transactions

In order to deny a claim, you will need to produce the documentation that you relied upon to reach this conclusion. There are many customers that don't keep track of their balance or purchases and just know they are out of money when the card stops working. As noted above, there is nothing in the information that you have provided to this point that justifies denying the claim.
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#2269911 - 05/02/22 04:50 PM Re: Online Banking logons and Reg E Dispute Valley girl
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 336
TX
Thank you Brian. I agree with you that many consumers don't keep track of balances. But she spends a lot of time on our online banking portal and there isn't much point to logging in other than to either look at balances or activity.

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#2269915 - 05/02/22 05:09 PM Re: Online Banking logons and Reg E Dispute Valley girl
burkemi Offline
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Joined: Nov 2013
Posts: 522
From the information you've provided, I agree with Brian. There's nothing that justifies denying this claim. Remember that Reg E is a hyper consumer friendly regulation. If you have questions about whether or not you can deny a claim, it's probably a safe bet that you shouldn't.

CAN you deny the claim? Sure. You can deny it; but the bigger question is

Can you DEFEND the denial if your customer complains to your regulator and/or an examiner questions the denial? The answer there is almost certainly not. This would be a battle you'd be destined to lose. Then you're out the dispute amount, perhaps a penalty, and a reputational hit.

Your best option is to pay the claim without issuing another debit card.
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#2269932 - 05/02/22 07:07 PM Re: Online Banking logons and Reg E Dispute Valley girl
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,629
Cape Cod
Logging on to your OLB system means nothing unless this is a prepaid or government benefit account. Yes, you can use it as an argument that she ought to have seen .... but the regulation doesn't say that logging in is automatically going to be considered the customer saw anything.

RED FLAG!==>She said many people have access to her Ticketmaster account. You really don't want an accountholder who leaves the account that exposed to third party use. You opened this thread with "I have a very young member ...." I second burkemi's suggestion to cancel this young person's debit card, and not reissue another. I would even go so far as to suggest you close the account (I know credit union's can't easily cancel memberships, but you should be able to shut this "trouble-waiting-to-happen" account down.
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