Skip to content
GeoDataVision
Learn More - Click Here!

Thread Options
#848959 - 11/05/07 04:56 PM (Reg E) How to minimize increasing loss to bank.
jusacsb Offline
New Poster
Joined: Nov 2007
Posts: 4
Texas
Hello everyone,

I have dealt with BSA complaince for the better part of my career and now I am also dealing with the consumer compliance side. The institution that I work for is experiencing increased losses due to fraud with fake bank cards. How have some of you who are experienced with Reg E have dealt with this issue to minimize the loss to the bank. If you can provide guidance to the interpretation of the reg would be appreciated as well as any guidance towards policies and procedures to implement would be greatly appreciated.
_________________________
J. Salazar, ACAMS

Return to Top
#849298 - 11/05/07 09:12 PM Re: (Reg E) How to minimize increasing loss to bank. jusacsb
ktac MITCH Offline
Diamond Poster
ktac MITCH
Joined: May 2005
Posts: 1,813
Giant side of TX
I will give this a shot for you. The short version in plain english is something like this:
1. Reg E was passed to protect consumers in the new world (new when the law passed) of electronic transactions
For example the Commentary on Reg E regarding Limitations on Amount of Liability of the consumer says
Quote:
Consumer negligence. Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer's liability for unauthorized transfers.


2. In order for Visa, MasterCard, etc to sell their product their operating rules favor them & their merchants & consumers. For example $zero consumer liability rather than $50 that is in Reg E,

Concerning Counterfeit Cards that you mentioned. For the consumer it is an unauthorized transaction = Reg E protects them.
For the merchant they have a signed receipt and got an authorization through the network = Visa rules protect them.
Even if it is as ridiculous as your customer is John Smith & the signed receipt says Antonio Ribaldi.

SO - net result, because Congress wants to protect consumers & banks want customers to use debit cards (we get interchange income & less cost to process -vs- paper check) & Visa etal want their cards accepted . . . The Banks Always Pay
_________________________
My opinions are just that, and might be worth what you paid for them.

Return to Top
#849438 - 11/05/07 10:28 PM Re: (Reg E) How to minimize increasing loss to bank. ktac MITCH
jusacsb Offline
New Poster
Joined: Nov 2007
Posts: 4
Texas
Thanks ktac Mitch,

So basically, the only way the bank wins is if;
1) the customer does not alert the bank within the specified time identified in 205.6, or in an appropriate time, and
2) The bank takes into consideration whether or not reissuing a bank card if the fraud seems to keep happening to the same customer,

So do banks just have to bend and take it?
_________________________
J. Salazar, ACAMS

Return to Top
#849537 - 11/06/07 12:24 PM Re: (Reg E) How to minimize increasing loss to bank. jusacsb
DeeQ Offline
10K Club
DeeQ
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
Now you've got it. It stinks, but there it is.
_________________________
Get your facts first, then you can distort them as you please. - Mark Twain

Return to Top

Moderator:  Lestie G