I know there are a lot of Reg E questions being asked and I apologize if this question seems to repeat any others. We have a customer who has the beginning affects of dementia that is claiming a monthly insurance charge debited on her M/C debit card is unauthorized. The amount has been debited since last June 2016. She notified us on February 3rd that she did not authorize this. Our question is - are we liable for all charges 60 days prior to the notification? For example: would we be responsible for charges debited in December and January since she notified us on Feb 3rd? Or since the customer did not notify us within 60 days of the very first debit (June) are we not responsible for anything? We keep reading the error resolution notice and seem to get more confused as we go. Also - the debit card has been closed as of Feb 3rd.

Thanks!

First, find out whether the customer is claiming that none of the charges were authorized, or only the last X charges. In other words, was the deduction never authorized, or was it authorized at first, but the authorization was canceled at some point. Then investigate by contacting the company initiating the entries. Maybe you'll be able to confirm that some of the transactions were unauthorized. Let's assume that the transactions starting with the one in September 2016 were unauthorized. Figure out when the statement showing the September debit was sent to the customer (or made available if held or e-delivered). Start with that date (statement sending date) and determine the date that is 60 calendar days later. That is the date before which the bank is accountable to the customer and any of the debits posting after that date are the customer's responsibility (because she had a responsibility to check her statements and notify you of unauthorized transactions so that you could prevent future unauthorized debits from the company).

If the lady is slipping into dementia, this is not going to be an easy task for you.

Thanks for your help John. I agree - this will not be an easy task. The customer is claiming that she never authorized any of the transactions even though she had been debited for the charges since last June. However, with the dementia factor, it is going to be hard to figure out if she actually authorized it and then tried to cancel or if she simply doesn't remember authorizing it.

The insurance company should have some type of authorization on file from when it was initiated (I know I had to sign for my authorization). Whether she tried to cancel at some later point is the difficult part unless she has other insurance in place?

Insurance companies are very careful about documenting policyholders' EFT authorizations. You should have no problem getting confirmation, and it's very likely the authorization was given. From personal experience with my mother, who suffered from Alzheimer's, it's most likely that your customer has simply forgotten that she ever authorized the payments. Whether seeing a copy of her authorization will remind her is anyone's guess, but it's not likely to be retained. She may fixate on the insurance charges even after you've closed the investigation, regardless of which way it goes.