Is anyone aware of Reg E allowing a bank to decline an unauthorized withdrawal claim from a customer who is filing his 2nd claim within as many months? I remember seeing something that led me to believe we could decline someone who filed 2 or more claims within a 12 month period. The customer was given full credit for his first claim of $100, now we have another claim for $200. The card was "lost" in both instances. Thank you for any help.

This isn't Reg. E. You may have enhanced zero liability rules under MasterCard which may be negated due to frequent claims, but you can never do less than Reg. E requires and this means you cannot deny the claim just because you paid a recent claim on that account. Instead of zero liability you would revert to the $50, $500, unlimited.

I would consider revoking this customer's ATM card privileges as they apparently are not responsible enough to safeguard the card.

Actually, if you read the small print in regards to MasterCard's zero liability policy, it does not pertain to transactions where the PIN is used as the method of verification for unauthorized transactions.

"Zero Liability does not apply to MasterCard-branded cards issued to an entity other than a natural person; primarily for business, commercial, or agricultural purposes; outside of the U.S. region; or if a PIN is used as the cardholder verification method for the unauthorized transaction(s)."

Do we know if a PIN was used? The questions isn't zero liability, it is denial of a claim due to the frequency of claims. You have to address the claim, then the customer relationship.

A PIN was used in both claims. The customer says he did not give out the PIN to anyone, but our reports indicate there were no failed PIN attempts. I realize it could be a counterfeit card, but in this case it seems very unlikely. We are going to pay the claim, although reluctantly, and no more cards will be issued. Thanks for the feedback!

Was the PIN written on teh card? Were withdrawals done where your customer would often do them? No cameras I assume.

The PINs were obtained somehow. It is highly unlikey that they were guessed. Shoulder surfing is a possibility, a skimmed card, or the customer was in on it.