Business customer authorized his contractor to use his card to make a one time purchase....today we received a dispute from this business customer. The contractor that he gave one time authorization to used his card several times over the phone from 5/30 to 6/26 for transactions totaling over 8000.00. What is our liability?

Realize of course that Reg E is a consumer (natural person) protection regulation. It may not apply to a business account, unless disclosures were inadvertantly given. There are safeguards in the reg for consumers - below.

1005.2 definitions (commentary)

(m) Unauthorized Electronic Fund Transfer

2. Authority. If a consumer furnishes an access device and grants authority to make transfers to a person (such as a family member or co-worker) who exceeds the authority given, the consumer is fully liable for the transfers unless the consumer has notified the financial institution that transfers by that person are no longer authorized.

Thank you!

The staff interpretations of Reg E that are cited apply to a consumer who hands their card to a family member or friend and says, "Get me $20.00 from the ATM, and they proceed to go on a spending spree.

The fact that I give my card number to a vendor to make a one time payment does not give them carte blanche to continue to charge my card for eternity.

Were all of the charges to the contractor or were they to third parties? If to third parties, how do we know the contractor was the one who made them? If they are all payable to the contractor, is there a dispute over goods/services here?

When the cardholder asserts fraud, Zero Liability still applies unless the cardholder was grossly negligent in safeguarding their card. Making a payment for goods/services can hardly be considered negligent. I need more of the story before I would say that they claim can be denied based on a one time authorization.