Okay...here's the scenario. Debit card customer comes in with 9 debits on her account from XBox Live. She has had similar debits from XBox Live on her account for several months, but is only disputing these 9 that just occurred. She claims that her grandkids were over, playing on her husbands XBox and had ordered whatever it is you can order on XBox (I don't really know, to be honest!) She says that although her husband had supplied Microsoft with the debit card number to use for purchases made via his XBox console, they were unaware that their grandkids were making these purchases. The games or whatever was purchased were downloaded to his XBox console. My question is this...do we treat these as unauthorized debits, give the customer credit and move on? Or, would they be considered authorized because the husband gave the card number for purchases made on the console and knew the grandkids were playing on it, thereby having some knowledge that it was at least possible that they could be making purchases while playing on the device?

We have had more of these types of disputes lately than I can count, although most involve Google Play or the ITunes App Store and a parent/grandparent that was not aware that a child/grandchild was making purchases while playing with his/her phone/IPad or other mobile device. We have been successful in getting the merchants to simply reimburse the customer in some cases, but not all, which is very frustrating. And just for the record, while some of these purchases are very small..some are very large or involve multiple "unauthoried" transactions, resulting in a very large loss to the bank if we cannot successfully charge them back.

Is anyone else experiencing anything similar? Any advice on the best way to handle these situations? We must forever be mindful of UDAAP in addition to Reg E / Visa rules, so we need to be sure we are treating each of these situations the same. I'd appreciate all the feedback I can get!

Thanks!

If she states they are not authorized, then they are not authorized.

I would also state, while completing her claim, that in order to mitigate future losses as the bank eats these and not the company these were purchased from, you will also be disabling her debit cards and will not be reissuing them, so as to ensure this doesn't happen to her again.

Might be just enough for her to decide to have a stern talk with the grans versus leaving you to hold her empty bag.

I disagree with Just Jay. Once they provided the grandkids access to the game console (to which they had also provided their debit card) it is the same as if they had given the kids the physical card. I believe that this situation does not meet the definition of an unauthorized EFT in 1005.2(m) as granted authority to a family member to utilize their access device.

The fact that they did not realize that the phone/game console, etc. could be used in this way by saving their card to it does no relieve them of liability. The one caveat that I would add is that if the customer has their ID & Password compromised/hacked/stolen and their are unauthorized charges to the card, then these would be covered by Reg E.

I have to agree with Brian on this one. Sorry JJ.

I know I am taking a narrow view on this one and maybe I am being stubborn, but IMO just because the unit is tied to the card, does not mean authorization to play with games on the unit is also authorization to connect and purchase/download/stream additional games or events through the unit as well.

I do not see the game system as an access device, as you still need the card number to obtain more. It's like if I gave you my wallet with cash and card in it and told you spend the $50 in cash in my wallet in any way you wish. You do so, and then use the card too. Even though you had posession of my card you did not have authority to use it. Similar here as they were allowed to play the game son the Xbox, but not given authority to purchase more.

Of course, if I was granny, I also wouldn't be ballsy enough to ask the bank to reimburse me for something so silly.

I'm with Brian, but I would also review the XBox agreement and provide a copy to the cardholder. I doubt thay actually read it when signing up for the service, and there's most likely verbiage authorizing future purchases. Showing what they agreed to helps educate customers about reading the fine print before clicking "agree" in the future.

I'm not familiar with the XBox but I know that many of these gaming consoles and phones and tablets that can be used to download games, tunes, software, movies and other electronic files for a price include at least minimal security options that can be set so that a PIN or access code has to be entered for each purchase. You'd be doing your customer a favor (as you deny her claim) by suggesting that, if the kids are going to be allowed to use the console, any available security option be activated.

I'm in Brian's camp.

I'm with Brian as well - whe entering the information into XBox it asks for a User ID, Password, and card information, and you have the option to save it or enter each time. Sounds like Gramps opted to save, which is, in my opinion, giving implicit approval to use for future occurrances as well. By anyone using the gaming system.

I got a feeling that grandpa is going to be spending some time with Fido

::waves the white flag::