Skip to content

Debit Card Dispute That is "Friendly Fraud"

Answered by: 

If a customer files a debit card dispute that is "friendly fraud," what is the bank's obligation considering the customer has admitted that their minor child made the purchases without consent and apple/iTunes is not at fault?

There is no such thing as "friendly fraud" in Reg E. There are authorized transactions and unauthorized transactions and it doesn't matter if it was a child, sibling, spouse, etc., so long as that person isn't on that account, they had no right to take the owner's money.

Because of that, the only allowance to be made is one of courtesy. You'd want to tell a parent, as an example, that the claim will be reported to the police because that is the bank's policy as the bank steps into the consumer's proverbial shoes and has the loss. I have had parents withdraw their claim at that point, and I have had them say maybe this is what the child needs to get straightened out. Otherwise, it is a claim to be handled as you normally would any similar claim.

First published on 07/19/2020

Filed under: 
Filed under compliance as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics