Card # Stolen from Online Wallet

Posted By: TeamComply

Card # Stolen from Online Wallet - 08/25/21 02:41 PM

Customer indicates he has charges on his account from Cash App that he didn't authorize. Here's the situation. Dad and his son live together. Son and son's friend helped Dad set up a Venmo account on his phone, Dad's card # and/or account number were needed to set-up Venmo. Now Dad is seeing unauthorized charges from CASH App coming out of his account with his son's or son's friends name on them. Seems the card number and/or account number were stolen from dad's phone in order to process the CASH App transactions. We are a MasterCard branded bank. Is this type of situation (where online wallet credentials/info was believed to be stolen) covered under Reg. E and MasterCard zero liability rules?
Posted By: Valley girl

Re: Card # Stolen from Online Wallet - 08/25/21 02:55 PM

To me it would be impossible to prove the theft of the number came from Venmo - the son's friend or the son could have taken the number from the card itself during setting up the Venmo. I would process it as a Reg E because I couldn't prove the info was stolen from Venmo.
Posted By: rainman

Re: Card # Stolen from Online Wallet - 08/25/21 03:13 PM

The critical question is whether the Venmo charges are coming from the Venmo account that dad set up (with help) or are coming from a different Venmo account that was set up using dad's card info.
Posted By: BrianC

Re: Card # Stolen from Online Wallet - 08/25/21 04:49 PM

Since dad did not grant authority to junior or junior's friend to originate transactions, this falls under an access device obtained through robbery or theft according to the commentary of 1005.2(m) and CFPB Reg E FAQ #1 & #2.

You could make the argument that the customer did not exercise reasonable care in safeguarding the card from loss since they let junior have access to the info to set up the Venmo account so Zero Liability would not apply.

If you conclude that junior & friend are responsible, you can also let dad know you will be contacting law enforcement for assistance in recovering the funds from them. If dad elects to withdraw the claim when presented with this news, make sure to get it in writing.
Posted By: TeamComply

Re: Card # Stolen from Online Wallet - 08/25/21 05:58 PM

So if we follow the second statement, and say zero liability doesn’t apply since he didn’t exercise reasonable care in safeguarding his card from loss/theft, then if he notified us timely (within 2 days) of learning of the loss/theft then his liability is $50 under Reg E. And if he didn’t notify us timely of the loss/theft, then he could be liable for up to $500. Correct?

And your third statement, if we conclude junior and friend are do you suggest we go about doing this? Through our investigation??
Posted By: Valley girl

Re: Card # Stolen from Online Wallet - 08/25/21 07:15 PM

Cash App is very good about sending all the information they have collected on the recipient of the funds, and I've not had any problems with any dispute I have ever filed with them. So I would mention to dad that Cash App may very well be able to present evidence that junior and/or his friend are involved especially since Cash App has their names on the transactions.
Posted By: TeamComply

Re: Card # Stolen from Online Wallet - 08/25/21 07:18 PM

Thank you Valleygirl - How do you contact or go about obtaining this information from Cash App (sorry, I'm not the one directly involved in the card dispute process here at the bank), and I'd like to share this helpful information with the person who does handle this. Thanks.
Posted By: Valley girl

Re: Card # Stolen from Online Wallet - 08/25/21 08:11 PM

Our card processor is Fiserv EFT. We file the dispute thru their system (we are a VISA issuer), and Cash App responds. I haven't had to go to pre-arb to get responses from Cash App either which makes me happy. I hate it when the merchants first response to a dispute is just a reiteration of the dispute we filed, and then we are forced to take it to pre-arb to get any real evidence. Cash App gives me the name on the account, phone number, IP information, possibly the email address. It's enough evidence that I have revoked provisional credit before or it's convinced me it is truly fraud.

We are a small FI, and in some ways, that makes it easier to learn the whole system - I handle debit disputes because someone had to learn Reg E and Visa rules.