Answer from Brian: If the transaction was one that the customer intended to do and the robbery took place after is was completed, then no Reg E does not apply. The customer authorized the withdrawal. However, if a bandit accosted the customer and forced him to make the withdrawal, then the transaction would be covered.
See the staff interpretations to 1005.2.
3. Access device obtained through robbery or fraud. An unauthorized EFT includes a transfer initiated by a person who obtained the access device from the consumer through fraud or robbery.
Answer from Andy: Based on my experience your Reg E liability could be the least of your concerns. We had a customer who was robbed at our ATM. It was in a low-crime, well-lighted and trafficed area, but the robber paniced and shot our customer in the leg before any cash was withdrawn. The bank consulted outside counsel who settled with the customer so we would not be drawn into a suit about the safety of the ATM, even though it was judged to be in as safe a location as one could expect. It was not in a store or building, however. The customer was a janitor and could not work while recovering. We paid the medical bills and about one year's pay after he was fired because he couldn't work. We were told we got off easy. Agree or not, liability exists but your case is less severe as there was no mention of injury. My point is, think beyond Reg E for the big picture but as to the specific question I agree with Brian.
First published on BankersOnline.com 7/08/13