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#946889 - 04/21/08 08:20 PM Decoupled Debit Cards
C_Groat Offline
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As this product may gain some traction, any thoughts on who the responsibilities fall to under Reg E?

Would the consumer need to file the dispute with the bank that owns the DDA accepting the ACH transfer or the bank that owns the access device causing the fraudulent transaction? I see the potential for multiple credits being issued if account owner files a claim with both institutions and this being an accounting nightmare.

If the customer makes an agreement with Bank A to accept all ACH transactions resulting from the use of the card, would this make all of the ACH transactions authorized even though the original transaction was fraud?

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#946946 - 04/21/08 09:09 PM Re: Decoupled Debit Cards C_Groat
John Burnett Offline
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Error resolution resides with the bank holding the account, since these items come in via ACH, in my opinion.

This answer isn't correct. I mis"spoke." See below, please.
Last edited by John Burnett; 04/24/08 09:39 PM.
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#947166 - 04/22/08 01:52 PM Re: Decoupled Debit Cards John Burnett
John Burnett Offline
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As to your question about an agreement with Bank A, if the customer is a consumer, Regulation E's protections trump any agreement. If the consumer files an error resolution claim, or a claim under 205.6, the bank has to adhere to Regulation E, its contract notwithstanding.
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#947856 - 04/23/08 12:37 AM Re: Decoupled Debit Cards John Burnett
Tigg Offline
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John, I have been reading that the liability for fraudulent activity would rest with the card issuer (they plan on giving "prompt" credit for error resolution) and that consumers who have one of these cards will be instructed to contact the card issuing bank for this - not that they will. It's a confusing prospect for consumers and banks alike. Also, some good news - looks like NACHA is going to put some rules in place that will require they not aggregate the transactions so the bank holding the account can somewhat help their customer. Does Reg E take the responsibility off the card issuer no matter what?
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#949166 - 04/24/08 09:44 PM Re: Decoupled Debit Cards Tigg
John Burnett Offline
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My apologies. I erred. Regulation E section 205.14 puts the onus on the access device (card) issuer to handle error resolution when there is no agreement between the card issuer and the financial institution holding the consumer's account.

The account-holding institution has to cooperate with the access device issuer's error resolution information and documentation requests.

Section 205.14 is one that most banks don't pay a lot of attention to. If you have customers who have received a decoupled debit card or a similar access device (Exxon/Mobil's SpeedPass, for example), you should familiarize yourselves with it.
Last edited by John Burnett; 04/24/08 09:45 PM.
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#949234 - 04/25/08 12:48 AM Re: Decoupled Debit Cards John Burnett
Tigg Offline
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Thanks for the heads up on Speed Pass, etc. I wasnt' even thinking of those. I thought they were attached to credit lines with the Mobile, Exxon, and such. I will definitely read up on 205.14. Thanks again!
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#950123 - 04/25/08 09:09 PM Re: Decoupled Debit Cards Tigg
John Burnett Offline
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SpeedPass can be attached to any credit or debit card. It need not be issued by ExxonMobil. Mine is attached to what used to be an old Shell Oil credit card that has morphed into a Chase card.
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#950241 - 04/26/08 12:13 AM Re: Decoupled Debit Cards John Burnett
Tigg Offline
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Gosh, it gets more scary and more complex everyday. They sure don't make it easy to be a regular ol' banker anymore. Thanks again!

P.S. Haven't been to the Cape in many years (since I lived in Eastern CT). Hope all is well up North!
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