We have a customer that started getting a POS debit back in June 2022 & is stating today it is unauthorized. If I am thinking correctly, they should have notified the bank within 60 days of the statement in which the initial (first) unauthorized debit occurred. If the statement was issued on June 30, 2022, then August 31,2022 would be the 61st day and the bank would not be liable if he didn't notify us prior to that. I want to make sure I am correct on this but then, since we use VISA for our debit cards, does the zero liability for VISA rules apply to the 61st day and after and now the bank must be out the money even though the customer didn't notify us in time?

You are correct that the consumer's notice of error was not timely according to 1005.11(b). Consequently, the provisional credit and investigation timeframe requirements of 1005.11(c) will not apply to this claim.

Visa's Zero Liability website notes the following about qualifying for Zero Liability protection:


"Replacement funds are provided on a provisional basis and may be withheld, delayed, limited, or rescinded by your issuer based on gross negligence or fraud, a delay in reporting unauthorized use, an investigation and verification of a claim, and account standing and history."

Clearly there was a delay in reporting unauthorized use so Zero Liability will not apply. However, note the commentary to 1005.11(b) notes that if the dispute involves unauthorized transactions, we must still follow the liability schedule in 1005.6(b) regardless of when we are notified of the error.

Effect of late notice. An institution is not required to comply with the requirements of this section for any notice of error from the consumer that is received by the institution later than 60 days from the date on which the periodic statement first reflecting the error is sent. Where the consumer's assertion of error involves an unauthorized EFT, however, the institution must comply with § 1005.6 before it may impose any liability on the consumer.

What this means is that we can take our time to determine if the transactions are unauthorized, but if we conclude that they are, 1005.6(b)(3) will require that we reimburse the customer for transactions between June 2022 and August 30th and the customer would be liable for transactions between August 31st and the date of notice.