Answer:
Liability on your bank depends on when the customer learned of the loss of the access device and when they notified you, more than on when the debits were made.
In general terms, if they notify you within two business days of learning of the loss of the access device, they have a $50 liability. If they go beyond that two-business-day period, it can be up to $500.
If all the debits were made within the first two business days, their liability will be $50, as their liability will not exceed that amount for that period.
If the debits spanned the two-week period, but your customer didn't realize the loss of the device until yesterday, and they called you today, that is within the two business days and their liability is $50.
If they knew of the loss of the access device two weeks ago, said nothing to you, and these withdrawals were after the two business days, you could have prevented them and the consumer will have up to $500 of liability.
These are Reg. E rules. I'd recommend trying the Reg. E liability calculator accessible from Bankers Tools to help with this.
Being ATM withdrawals, usually Reg. E will apply and the proprietary debit card rules will not because of the systems the transaction flows through.
You need to know the system and when they learned of the loss of the access device. The fact that the PIN was on or near the card is moot. Reg. E has said that carelessness and negligence on the consumer's part are not grounds for denial of the claim in this area. And the VISA rules cannot be more restrictive on the consumer than Reg. E.
First published on BankersOnline.com 08/02/04
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