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#2279672 - 01/11/23 07:43 AM Are we using 1005.14a to deny P2P "fraud"
bthorguson Offline
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Joined: Feb 2017
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A handy provision in § 1005.14(a) that may shift the responsibility for error resolution from the bank to the P2P service provider:

“A person that provides an electronic fund transfer service to a consumer but that does not hold the consumer’s account is subject to all requirements of this part if the person:
(1) Issues a debit card (or other access device) that the consumer can use to access the consumer’s account held by a financial institution; and (2) Has no agreement with the account-holding institution regarding such access.”


The first prong of our analysis is whether the P2P issues an access device. This prong is easy to satisfy in our situation since the P2P app itself is an access device since it can be used to initiate EFTs. If your customer can link their deposit account to one of these apps and then use the app to transfer funds, this section may apply.

Second, we look to whether there the bank and the P2P service provider have contracted with one another. For most apps, there is no contract present. However, you’d need to confirm before using this section of Reg. E to deny your customer’s dispute claim. If you have an agreement with the P2P service provider, then the Reg. E general requirements will apply to the bank and you will also need to review the contractual provisions regarding disputes. If you don’t have an agreement with the P2P service provider, they may be responsible for error resolution involving the EFTs they facilitate under Reg. E.

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#2279695 - 01/11/23 03:38 PM Re: Are we using 1005.14a to deny P2P "fraud" bthorguson
rainman Offline
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I agree with your thinking. Unfortunately the CFPB seems to take a much more expansive view of what constitutes an agreement between the FI and the P2P service provider. See FAQ 4 under the "Coverage: Financial Institutions" heading: CFPB EFT FAQ
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#2279962 - 01/18/23 08:07 PM Re: Are we using 1005.14a to deny P2P "fraud" bthorguson
John Burnett Offline
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In short, if the transaction hits your bank as a debit card transaction, your bank is responsible for EFT error claim processing and unauthorized transaction management under sections 1005.11 and 1005.6, respectively.

But if the transaction hits the bank as an ACH debit where the P2P or other fintech uses the consumer's check bank routing number and account number to originate an ACH debit to complete the P2P payment/transfer, you don't have an agreement with the fintech, and the fintech will be subject to 1005.14.
Last edited by John Burnett; 01/18/23 08:08 PM. Reason: typo
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#2280397 - 01/27/23 05:17 PM Re: Are we using 1005.14a to deny P2P "fraud" John Burnett
bthorguson Offline
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Thank you

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