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#2270032 - 05/04/22 04:02 PM CashApp Disputes
TMarie1220 Offline
New Poster
Joined: Apr 2022
Posts: 4
Hey everyone. I'm very new to the banking world. I've been reading everything I can find about Reg E because disputes are a huge problem we're dealing with. Specifically, CashApp disputes. Users link their cards to CashApp and then go into their CashApp and transfer money to people. They say these are unauthorized, that their account was hacked, etc etc. However, a lot of times the names on the CashApp recipients are their own names! These disputes are becoming increasingly frustrating. Are we really liable if the transfer is initiated from the CashApp side? It seems ridiculous that we are liable because it wasn't initiated from our side. They added their card to CashApp and all transfers were done through CashApp. Is there any way to fight these?

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eBanking / Technology
#2270092 - 05/05/22 04:40 PM Re: CashApp Disputes TMarie1220
TaraSue Offline
Junior Member
Joined: Oct 2013
Posts: 48
I will begin with saying that just because the transfer shows to their own name (or their spouse's name) that doesn't mean they weren't a victim of fraud. This is one way the scammers get the victim to send the cash - they tell them "hey I'm from Amazon and I'll make sure your Amazon info doesn't go any further - our records indicate a compromise. They walk the customer through setting up the CashApp account and tell them to wire 1K to an account in their name. Of course, the scammer is providing all of the account info and the customer doesn't have any access to it. Using a familiar name just improves the odds that funds will be sent. You do still need to follow Reg E timeframes and work through a dispute. A detailed conversation with the customer about what happened is especially important. Many times customers say their account was hacked when it wasn't - they were just following instructions about entering information given to them by a scammer. You really need to understand how the transaction occurred. Did the customer actually initiate the transaction, etc? We have had a few we had to provide credit to, and at least one we did not provide credit to (when the customer was on the phone with us and we specifically told him it was fraud. He sent it before we could shut down the card.

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#2270099 - 05/05/22 05:45 PM Re: CashApp Disputes TMarie1220
Irishguy Offline
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Irishguy
Joined: Aug 2008
Posts: 586
Kentucky
If your losses are significant, I know places like Chase have blocked linking to Cash App. You would need to check with your CORE, but that might be an option. But if you go that way, you probably should be prepared for the customer complaints that will go along with an action like that.

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#2270158 - 05/06/22 03:11 PM Re: CashApp Disputes TaraSue
TMarie1220 Offline
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Joined: Apr 2022
Posts: 4
Thanks for replying TaraSue. The destination for the CashApp transfer is to their CashApp name, like "Cash App * Bob Smith" and our account holders name is Bob Smith. You have to create CashApp accounts using your own name so I don't understand how someone else could make a CashApp with the account holder's name. As for getting as much information as possible, Visa is zero help. They go through a simple script and then we have to issue PC. I have one now where they say their phone was stolen along with their card....on March 18th. It's just too convenient for me but I know the burden of proof is on us and circumstantial evidence along with common sense isn't enough to deny.

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#2270159 - 05/06/22 03:14 PM Re: CashApp Disputes Irishguy
TMarie1220 Offline
New Poster
Joined: Apr 2022
Posts: 4
Thanks for replying IrishGuy! I didn't know Chase had blocked CashApp transfers. That's actually good to know. Our CashApp dispute losses are definitely becoming significant so it might night be a bad idea to block them. I guess I have to weigh risks vs benefits. It was previously discussed to block CashApp but it was a last last resort because it runs on the same rails as Venmo, PayPal etc. PayPal and Venmo aren't a problem, it's specifically CashApp. Bane of my existence!

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#2270179 - 05/06/22 09:09 PM Re: CashApp Disputes TMarie1220
TaraSue Offline
Junior Member
Joined: Oct 2013
Posts: 48
TMarie: Here's how it went for our guy. He got the call letting him know his "amazon account was compromised" and that to stop his information from continuing to go out, he needed to send "his wife" 1K. Now, this customer is elderly and not terribly tech savvy.. The fraudster walked him through setting everything up for a 1K transfer. The transfer looked like it went to her. but it did not. We issued provisional credit and, did the research. Your scenario may well be different, this is just my clearest example of what may have happened.

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#2270182 - 05/06/22 09:50 PM Re: CashApp Disputes TMarie1220
Andy_Z Offline
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Andy_Z
Joined: Oct 2000
Posts: 27,485
On the Net
I have studied the FAQs and still slice and dice the wording. I believe I know what the CFPB wanted to say and what they actually said to comply with Reg E. As an example, referencing this CNET article (which is a banking topic from not a bank):

https://www.cnet.com/personal-finan...89190&mid=13830933&cid=534696250 It says

"Note that the CFPB's guidance only protects consumers who are unwittingly tricked into transferring money.

If your bank refuses to reimburse you for a Zelle scam, your only recourse (other than pitching your story to local media) is to file a complaint with the CFPB."

I believe if the consumer is tricked into making the transfer, they made the transfer and it's not unauthorized. That is different from being tricked into giving the scammer access info and the scammer makes a transfer. In that case there was no intent to EFT, the consumer didn't do it and that is a valid claim. I still apply the "did the consumer do" the EFT test. If the consumer did it, it is not unauthorized. An exception would be your consumer at the ATM with a gun to their head. That duress calls for self preservation unlike "your Amazon account was hacked..."

I do believe banks will weigh the pros and cons of accepting P2P programs. Do any of your network affiliations require these be accepted? (I'm asking.) Otherwise banks should evaluate those with weak security protocols and explain to customers that the losses are too high from that vendor so the bank won't accept them for the good of the bank and the customers. Similarly, if there are egregious losses on an account, close the customer's account. They don't need a debit card so that can be refused, but perhaps the account itself needs to be closed. I'm a firm believer that a consumer who sees easy money, will come back for seconds. Those are not the customers my bank would need to bank.
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#2270187 - 05/06/22 10:21 PM Re: CashApp Disputes TMarie1220
Valley girl Offline
Gold Star
Joined: Aug 2014
Posts: 336
TX
Several years ago I contacted Visa to ask if I could limit some debit cards to ATM only transactions for members that didn't qualify for (no checking account) or didn't want a debit card, these members just had ATM cards and it was going to be very costly to change our couple of hundred ATM cards over to EMV. Visa said their logo is "everywhere you want to be" and we couldn't do limitations on where a card with a Visa logo was used. I believe they would have the same issue with cutting off P2P.

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#2270194 - 05/09/22 02:29 PM Re: CashApp Disputes Andy_Z
TMarie1220 Offline
New Poster
Joined: Apr 2022
Posts: 4
Thanks for responding, Andy! We do close the majority of the accounts who report these disputes. Unfortunately, it's too late by that time because we have to issue the provisional credit and we rarely win. I mean these people are saying their cards or phones are stolen and the "hackers" send the money to the account holders name. It's ridiculous that we have to issue provisional credit in these cases. We just had a dispute filed for someone who said that their car was stolen back in March and their wallet and phone were in the car so ALL transactions from March on need to be disputed - it's a lot of $$$$$$$$$$. Not even sure how we can win these because how can we prove their phone and card wasn't stolen?!

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