We have a customer who has repeatedly filed reg e complaints - all for reportedly unauthorized charges for prescription drugs purchased from pharmaceutical companies. Six complaints of this nature have been filed since June, and several were filed in previous years. The bank has not lost any money on this account. The bank would like to revoke this person's debit card privileges. Is there any regulation that would prevent the bank from doing this? Is there any notice requirement?

If you don't already have it, I would recommend that you add language to your debit card agreement that specifies that you can do just that. A bank can revoke a debit card at any time. There are no laws of debit card entitlement. I would give them adequate notice and revoke the card.

You already said it "the debit card is a privilage ". There is no reg that says you cannot take away the card. You could say that the bank considers this account "At Risk" for fraudulent activity and this is simply a risk the bank is not willing to take based on past experiences. It would be a mangement call whether to notify the customer, typically when we revoke a customer's privilege we do not notify the customer in advance so as not to allow them the chance to put the bank at risk during any set time period.

Review your cardholder's agreement and the text on the back of your card. Likely it says the card is owned by the bank and "at any time" you may revoke usage.

If these were all frivolous claims and there are more of these, you may consider adding a fee to your fee schedule for claims investigation. You can do this under "E", but check any affiliation agreements with V/MC as necessary.

You may charge a fee so long as it doesn't have a "chilling effect" and dissuade customers from filing claims. If the claim is valid, there is no fee.

We haven't done this, but in some cases I wished we had. We've had some folks file claims and it is clearly them at the machine. They were just trying to see if they could get the money back. These are the ones I dislike so much.

You could also opt to close the entire account if you don't have a good mechanism to to ban future card issuances.

When you clearly can tell its the customer at the machine, and you have caught them trying to defraud the bank, do you file a complaint with local authorities, or ask the customer to go away?

Although I realize that a debit card isn't credit, I'd be careful. Remember - we can't discriminate against someone for using one of their consumer rights. Also at a Kirchman advanced compliance seminar I attended we were told that we cannot revoke the card or close the account just because we have a 'problem' customer. Make sure you document everything.

Although I believe you should have well-defined policy in place in this area, I respectfully disagree with Kirchman's alleged statement. A "problem" customer can, in fact, be one you want to get rid of. Just define what sorts of "problems" you won't accept in your policy.

Do make sure, however, that you don't deny someone credit based on their abuse of Regulation E's error resolution requirements. That would be a Regulation B violation.

If all of these charges are indeed unauthorized, then it is clear that the customer is not taking the necessary precautions in safeguarding their card. I would find that to be a quite appropriate reason to suspend the customer's card.

We'll ask them to go away. The time and energy we spend on claims like this can be very costly and I see no reason to bank someone who figures if they can get 1 in 10 claims through they'll come out ahead. This is a Nigerian scam on a smaller scale.

Actually, Randy, the Equal Credit Opportunity Act prohibits discrimination based on a consumer's exercise of rights under chapter 41 of Title 15, which is the Consumer Credit Protection Act. The EFT Act is also part of chapter 41 of Title 15. So the consumer's exercise of rights under Regulation E cannot be used against them in a loan decision under Regulation B.

John - I stand corrected - that's why I love this game - learn something new everyday or relearn something that you have long forgotten