I need some advice on how to handle a dispute. Customer uses card to buy gas on Tuesday. Tries to use card on Saturday and realizes he does not have it. Backtracked to gas station. Gas station has card and gives it back to the customer. Next Saturday tries to use card but says unauthorized user – card has been deactivated on the Thursday following the initial Tuesday due to suspicious activity.

Customer files a dispute with the bank on the following day. Unauthorized transaction total $533.00. Does the customer hold any responsibility for losing the card for four days and not notifying the bank at that time?

The consumer has two days from the time they first relalize thier card is lost or stolen to report it to the bank in order to be limited to $50 liability. The days before he realized he was missing his card do not count.

So - does that mean that the customer is limited to $50 of the $533? Does the customer have any fault for not reporting to the bank that he was not in possession of his card for two days resulting in an unauthorized transaction?

I see your point. It’s an interesting issue, because he took his card back from the gas station and never told the back it was out of his possession. I still think you need to pay the claim. Reg E puts little responsibility for using common sense on the consumer.

Since the bank blocked the card even prior to the customer realizing that the card was even missing, the two day notice requirement for reduced liability seems a little moot to me. The bank blocks the card within two days of the initial loss, I think that pretty much falls under a third party acting on behalf of the customer - OSC 205.6(b)(5) - Comment 2.

Is it a Visa/Matercard debit card? If so there is a good chance that their $0 liability requirement will supercede Reg E in this case, and you will need to pay the enitre $533.