Is this exceeding authority and not unauthorized?

Customer gives debit card and PIN to son-in-law. Son-in-law gives debit card and PIN to wife who is the daughter of the customer. Wife uses card several times. Customer comes in and says she didn't authorize her daughter to use the card. We showed the customer video footage of one of the transactions at one of our ATMs which clearly shows the daughter using the card. The customer's response was, "Oh, yes. I knew about that one."

To me, you can infer that the customer knew the son-in-law had given his wife (customer's daughter) the card and PIN. Therefore, these transactions are not unauthorized because the son-in-law and daughter exceeded the authority given.

Agree? Disagree?

I feel that once you voluntarily give your PIN number to an individual, you're giving up your right to dispute a charge if you feel that they're using the card inappropriately.

A few years ago, a customer was going to the hospital for an extended stay. She gave her boyfriend the card to "get what he needed." When she returned home she wanted to dispute one transaction. He paid her utility bills, etc. but she wanted to dispute the ATM transaction because he had gone to the bar. We denied it as actually authorized because his authority was "as needed" and he needed a beer.

BSAguy -- The regulation is pretty clear (I didn't say "perfectly clear") on the question of the cardholder who gives the card to an individual with authority to make transfers who exceeds the authority given. The consumer (cardholder) is fully liable for the transfers [completed by the other person] unless the consumer has notified the financial institution that transfers by that person are no longer authorized. [Definition of unauthorized EFT at §1005.2(m)(1) and comment 2(m)-2]

However, you can't use that to say that the "authorized person" can transfer that authorization to a third person. The son-in-law's wife (more simply, the daughter) was not authorized to use the card under the facts as you described them. If Mom wants to say that the ATM withdrawal for which you showed the photo was OK, that's fine, but anything else daughter did is unauthorized if you accept the facts as you have described them as true.

KLNesta -- Welcome to BankersOnline's discussion forums.


JustJean -- I like your reasoning. But you didn't need to get that creative. The fact that he had permission to use the card was enough.

But once the mom says the one transaction was okay, wouldn't she then be liable for the rest because she was aware the daughter was using the card, and didn't stop it? What I've read has been that the cardholder did not authorize and did not have knowledge.