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#363876 - 05/25/05 09:18 PM Customer Dispute

We received a Reg E dispute from a customer who is alleging that an internet company charged her account without her authorization. It appears that they have a 13-year old son who visits an internet website that caters to teenagers and is basically an interactive "hotel"; not sure of the site address or exactly what the teenagers do there, but there have been some charges appearing on the parents account from this site. The parents allege that their son would not have access to their account information so they are not sure how the charges were made. The original account was blocked and a new card was issued; however the parents reported that as soon as the new card was activated they noticed some additional charges from the same web site. The father is concerned that this is fraud and may be identity theft but the bank is more convinced that the child has the card information and is actually making these charges. The bank is not sure how much more investigation they should do on this. The checkcard is Visa branded so would the customer only be limited to $0 and the bank would have to absorb the charges or does the bank have other options. Thanks for you thoughts?

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Operations Compliance
#363877 - 05/25/05 10:12 PM Re: Customer Dispute
Chiquita Banana Offline
Diamond Poster
Chiquita Banana
Joined: Jun 2002
Posts: 1,044
The banana bin
Has Visa determined that you have no chargeback rights? I would still persue the chargeback anyway to see what kind of info you can get.
But you're right...a whole brand new card with numbers involved in the SAME transactions? Sounds awfully fishy to me.
My opinions are definately my own. I could be wrong. But I don't think so.

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#363878 - 05/25/05 10:32 PM Re: Customer Dispute

It appears that the website is a "3D secure merchant"?? and does not give charge back rights.

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#363879 - 05/26/05 01:40 AM Re: Customer Dispute
Andy_Z Offline
10K Club
Joined: Oct 2000
Posts: 27,542
On the Net
The bottom line may well be that the fees get reimbursed. You lose. And I wouldn't reissue the parents a new card. I would tell them that based on your experience, they are not taking care of the card and it is very likely their family member who is doing this. You might also see if the site will provide any assistance as to how the charges are made, dates, times, period logged on, etc. (unless you have that) and ask them to see how that compares to family members access to the home PC. They should also check the PC, the cache, web browser history, etc. Who knows, they may call you and admit guilt.
My opinions are not necessarily my employers.
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#363880 - 05/26/05 03:31 AM Re: Customer Dispute

Thank you Andy. The bank is very frustrated and is concerned that if they close down the checkcard, that the customer will file a complaint, but it looks like it may be the only way the bank will be able to save itself against future claims. Would that really be the bank's only option in this?

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#363881 - 05/26/05 01:34 PM Re: Customer Dispute
redsfan Offline
Power Poster
Joined: Dec 2000
Posts: 3,455
The Pennant Race
It is the only option that will prevent the customer from filing similar claims against you in the future. Remember, Reg E is heavily weighted in favor of the consumer - the fact the customer exercised their error resolution rights in the past can't be a factor in evaluating a new claim.
The opinions expressed here are personal and do not represent opinions of my employer.

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#363882 - 05/26/05 02:15 PM Re: Customer Dispute
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
VISA's "zero liability" rule is not absolute, their rules acknowledge the customer's "gross" negligence as a possible defense. (Second time, same web site their son vists - sounds right to me.) The rules are not publicly available, so I can't cite you to the specific provision. (Their Reg E protections are unaffected by negligence, regardless of the adjective.)

In any case, no more debit cards for Mom or Dad. "Fool me once, shame on you. Fool me twice..."
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#363883 - 05/26/05 03:04 PM Re: Customer Dispute

So the resolution of this is to treat it as "unauthorized" credit the account and then close the card? That would be for Reg E but what would happen with Visa? Since there are no charge back rights from the internet company is the bank just out of their money on this?

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#363884 - 07/08/05 10:04 PM Re: Customer Dispute
Joined: Feb 2004
Posts: 67
Sorry this is a bit late in adding to this post, but VISA does have their "friendly fraud" clause in their rules. If you did do more investigating, and it turned out to be the son, are they willing to prosecute him? If not, you, the bank, are not liable.

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