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Debit Card Dispute/Provisional Credit-Divorce

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We have a husband and wife that are getting a divorce. The wife used the husband's debit card and now he wants to dispute the charges. We submitted the charge back and provisional credit was denied. We received documents from the merchant verifying the card info. Do we need to give him his money back and take the loss?

If the disputed charges are on an account owned individually by the husband, the fact that he knows who stole his card does not give the bank grounds to deny the claim. He has a legitimate claim under Reg E unless the bank can conclude that he gave her the authority to use his card.

If the soon-to-be-ex is a joint owner of the account, the bank may choose to take the route of denying the claim on the basis that the wife had equal rights to the funds in the account. However, it must also be prepared to be dragged into the middle of what appears to be a messy legal battle should this matter go to court.

First published on 08/18/2014

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