Donation/Fraud- Regulation E? Visa Rules?

Posted By: WABComply

Donation/Fraud- Regulation E? Visa Rules? - 01/13/20 02:36 PM

I have a situation and need some assistance. I have a case in which a customer used their debit card/VISA to make a donation to a local school PTA. The Donation was in July. In August the school sent an email to the parents advising that the company they used to get the donations from shut down and has not given them any money in May and June. The customer alerted the Bank in October. The case was submitted to our 3rd party vendor as "consumer dispute". The vendor needed more information but the customer never responded. They closed the case. It was re-opened by the Bank. Again the vendor requested information and again it was closed due to no response and we were advised that we are now 120 past the time of transaction and no charge back can be given.
The Bank completed a formal letter advising the claim was rejected. Then the customer finally responded by giving the Bank a copy of the email notification from August.
I do not see this as a Reg E Claim, however our debit card is tied to VISA. 2 things- 1: Am I correct that this is not a Reg E claim? 2: Due we owe the customer the refund? There is no product being received since it was a donation. Also the NY DOJ opened a case.
I feel we did our diligence and no further action is required. Help please. Thanks.
Posted By: rlcarey

Re: Donation/Fraud- Regulation E? Visa Rules? - 01/13/20 02:58 PM

It is not Reg E, the charge was authorized. I highly doubt that VISA zero liability applies to this transaction either, but I will let someone else that knows more about that program to opine.
Posted By: BrianC

Re: Donation/Fraud- Regulation E? Visa Rules? - 01/13/20 04:34 PM

VISA Zero Liability applies to fraudulent transactions that occur due to lost, stolen or compromised cards. There is no Zero Liability protection, either.
Posted By: Andy_Z

Re: Donation/Fraud- Regulation E? Visa Rules? - 01/13/20 08:41 PM

I can only reiterate that Reg E doesn't see this as a valid claim. I do not know if any NY state laws will side with the consumer. A credit card (Reg Z) claim may look at satisfaction with the product or service and say there were no services performed, i.e. funds provided to the PTA. That could be questionable. Does state law afford any protections that could cause doubt?

What I'd like to see is a statement footer, "the bank is considering increasing account fees because so many customers regret a transaction they asked us to complete, and then want their money back long after it is spent because they are no longer satisfied with their spending decision." How would that go over?
Posted By: WABComply

Re: Donation/Fraud- Regulation E? Visa Rules? - 01/13/20 10:02 PM

Thank you all for your input. I will go check out if there are any state restrictions.
Posted By: John Burnett

Re: Donation/Fraud- Regulation E? Visa Rules? - 01/15/20 07:59 PM

I'm guessing that the letter from the PTA may have had two aims -- (1) to warn parents not to make any further donations to the PTA using that vendor site, and (2) to plant the idea of a direct donation to replace the one(s) that are now apparently never getting to the intended recipient.

This really sounds like the PTA may have to chase that vendor for their money, and I don't hold out much hope for success. As to the earlier comments, I agree -- Not Reg E, and no Zero Liability.