Customer Reg E Dispute

I have a customer who I personally spoke with on 9/29/2020. He started the conversation with not knowing a merchant who used his Debit Card to charge his account $19.99. He stated the charge has been happening for a while, but didn't know who it was. I stated I would be restricting his card to prevent losses and he promptly stated he had to have his card for that day to rent a car. I reiterated that the card was being restricted. Customer stated he did not wish to pursue the charge as unauthorized in an effort to keep his card. I have his verbal statement on the phone, and then an email to my staff stating that his wishes. I unrestricted the card after that (Stupid mistake, I know) and now he's come back claiming charges as unauthorized. Based on his initial interaction with me, I feel he can't claim the charges as unauthorized. I don't see anything with Reg E, so I'm curious was others thoughts are?

Is it Friday yet?

Two things.

1. Be leaving the card open, the bank is still responsible for any subsequent unauthorized charges. We can't hold the customer responsible for our failure to act. See the commentary to 1005.6(b)

3. Limits on liability. The extent of the consumer's liability is determined solely by the consumer's promptness in reporting the loss or theft of an access device. Similarly, no agreement between the consumer and an institution may impose greater liability on the consumer for an unauthorized transfer than the limits provided in Regulation E.

As to withdrawing and the resubmitting a claim, this is covered by 1005.11(e) and commentary:

(e) Reassertion of error. A financial institution that has fully complied with the error resolution requirements has no further responsibilities under this section should the consumer later reassert the same error, except in the case of an error asserted by the consumer following receipt of information provided under paragraph (a)(1)(vii) of this section.

1. Withdrawal of error; right to reassert. The financial institution has no further error resolution responsibilities if the consumer voluntarily withdraws the notice alleging an error. A consumer who has withdrawn an allegation of error has the right to reassert the allegation unless the financial institution had already complied with all of the error resolution requirements before the allegation was withdrawn. The consumer must do so, however, within the original 60-day period.

Since we did not complete an investigation when the customer first provided notice, we must complete one now since less than 60 days have passed.

Thank you Brian, The team is working on the investigation either way. Still kicking myself for not taking action against the card. The claim amount is small, less than $50, but could have been worse.

The option to have a card is more the bank's than the customer's. Look at your card and your agreement. I'd bet both say the card belongs to the bank, and that gives the bank the authority to act.

So your claim is less than $50. If the relationship is profitable and you want to keep it, pay the claim, learn your lesson and move on. If it isn't profitable, investigate the claim and do not issue a new card. The consumer will likely move on.