Can anyone please tell me if "provisional credit" under Reg E is waived, if in this case, one of seven fraudulent transactions was "PIN" based for a POS transaction. The other six transactions were signed for (via credit transaction). Is there any reference in Reg E that would support the bank not providing the provisional credit?

Thank you.

I don't think so. Even if your customer ran down the street naked yelling out his PIN, I still think you have to provide provisional credit under the Reg.

I agree, but if the card is a visa, you only have 5 days to give provisional credit.

What if you give the credit and the customer walks off with the funds before an investigation can be concluded on that may prove they were neglegent?

Thanks.

A customer must have full use of provisional credit during an investigation, including taking the money. If, during the 45 day investigation, the transactions are proved to be legit, you will then revoke the provisional credit. Reg E also requires that you honor all overdrafts for five (5) business days after revoking the provisional that you would have honored if the provisional credit were still there. If at that time, the customer has "walked off with the funds" and their account is overdrawn, you would persue whetever collection efforts you normally would on a deliquent account.

Hi Andy,

Thanks for responding to my original question. There are seven debit card transactions to this fraud. Six being card based (signed for) and the seventh is PIN based. One of the (signed for) six transactions was at the same establishment as the PIN based transaction. Can provisional credit be denied, for all seven transactions, due to the PIN number not properly safeguarded (by the customer)or the customer actually gave the PIN number for someone to use (but we don't know that for sure since the customer claimed she did not authorize any of the seven transactions)?

When someone files a dispute how can you tell when it's a PIN based transaction or one that was signed for?

Provisional credit under E is not based on the type of transaction, but rather your inability to resolve the claim within the 10-business day window. Aggravated ignorance isn't going to be a way out, assuming the timing requirements of 205.11 apply. If you were notified within 60 days of the statement date, I think you have to hustle and get it done in the 10 day window or pay the provisional.

You should be able to tell the difference by the codes on your system. There should be different codes based on the way the transaction is processed. Also, some banks use different switches for PIN vs. Sig based transactions. Check with your software vendor if you are unsure of how to differentiate.

Is there any way that a theif can "bypass" a pin at a receptacle using a stolen debit card?

I am an Insurance Adjuster, and I have a claimant whose card was stolen, but the bank will not reimburse him citing insd did not comply with conditions for the card. Unless there is some way a theif can "bypass" the pin, we cannot argue with the bank.

Generally no. The PIN is required. But the consumer may have been shoulder surfed or their transaction video taped. There are a number of ways to gain access to a card.

While I have no idea what the claim situation is, the fact that a PIN was used cannot automatically cause the claim to be denied. This forum is not the place to pursue this, however. You should provide specifics in the Ask a Banker forum if you want more.