We have a case in which every sign points to fraud. The department that originally worked the case didn't pass it off to our fraud group timely, so we're well beyond timeframes. Fraud doesn't want to reimburse- the merchant provided an imprinted card and a photo ID. My instincts tell me we need to reimburse since we missed timeframes. But, common sense tells me this customer is trying to get away with $750. Thoughts?

It happens to the best of us

I would give the customer the reults of your investigation and close the claim. If the chargeback did not prove fraud then no loss. Then I would note in my case why the resolution was not timely. One out of hundreds should not be a major issue. I would also follow up with the Manager of the dept that held onto it to follow up on proper procedure.

The REG does not state that if you miss your timeframes you have to take a loss and pay.

Do any of the transactions in the fraud claim also qualify as a Billing Error? You must adhere to the requirements of Section 205.11 if any of them qualify. If your center took too long to resolve (45 or 90 days whichever applies), then you will have to take the financial loss. You may be able to bill the $50 allowed under this section assuming it is disclosed in the card agreement.

If any of the transactions are not Billing Errors, then you do not have any time frame restrictions under Section 205.6 on those transactions. The documentation you have shows the transactions are valid and you can debit the consumer. The monetary restrictions outlined in 205.6 do not apply here since you have determined the transactions are in fact authorized.

The customer is claiming the transactions are unauthorized, thus they would meet the definition of a billing error under 205.11(a)(1)(i), from my read.

For the definition, sure. But did they must make the claim within the required timeframe - 60 days of the mailing of the statement that has the transactions?

Geshhh..how late are we talking here? 30 days? a year?

The customer disputed it within a week of it happening.

Then how long was it before the investigation dept got it?

No where in the reg does it state that if you miss a timeframe you have to reimburse a customer. We're pretty sure this is fraud- it seems unreasonable to have to reimburse a customer on a technicality when they truly are not due the money.

They got it within a week as well. There were some problems with the card being detached from the account. In the end, the issue became the untimely handoff to our Fraud team.

Then from a strictly regulatory viewpoint, I'm afraid the consumer has properly asserted a Billing Error and you can't rebill. You might be able to hold him liable for the $50 the reg allows (that's per fraud event, not per transaction) assuming it is disclosed in the card agreement. One caveat - if the transactions in question are not ATMs, then you are not allowed to bill anything thanks to the association's Zero Liability policy. If they are ATMs, the policy doesn't apply.

What you can do is provide the documentation to the consumer and ask him to explain it - you are sending this documentation to him and would like to know what he thinks about it. Don't address the fact you got this from an investigation and took too long or that you want to rebill him, let him draw that conclusion and accept the transaction as valid. Once he withdraws the dispute, you can then rebill him.

However, if he doesn't want to withdraw, you're stuck with it. Sorry, but the rules require you to make a timely investigation.

The whole REG is a "technicality".

IF the bank missed an opportunity to conduct an investigation for this customer due to their lack of timeliness, then yes they Bank should take the loss. BUT it sounds like you where able to resolve the claim by getting the proper docs needed,s os someone did something timely, an investigation was conducted.

There is a difference between conduct and complete. The reg says nothing about conducting an investigation. It says "complete" the investigation within 45 or 90 days as applicable. Based on what M&M stated, the investigation was not completed within the required time frame.