What is to stop a customer from really taking advantage of the bank's liability based on the way Reg E protects the customer. For example, a father says the son stole the visa debit card and made an unathorized purchase. Our review shows that the unauthorized transaction was to pay a bill. How could we determine if the father may have received some benefit of the bill payment (especially with all the privacy rules now...can't get info). Or, does the bank just eat this one?

The debit was to pay a bill, who received benefit?

Without going into the particulars, you are, to a large extent, left hanging out there. But after the first claim, what compelling reason do you have to reissue a new card? You don't have to. That is your choice.

In my Reg. E webinars, I usually repeat that "it isn't fair" several times. It isn't meant to be.

I would have the account owner (the father) complete an affidavit in which he identifies the person using the card and take a notarized statement from him. This would then be the basis for my investigation anf the filing of a report with the police. I would also have the father file a stolen card report with the police.

The card holder has two choices in this case. Withdraw his claim or file the claim and the son is arrested.