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E-bay & the Angry Customer

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Question: 
A customer purchased something from e-Bay and claimed that he was not satisfied and returned it to them by mail. The seller did not credit his PayPal account so he is attempting to dispute the purchase through our bank. In an e-mail between the seller and purchaser (our customer) the seller mentioned receiving the merchandise back, but is now claiming that an error was made and that the merchandise was not received back by mail. Our attempt to dispute the transaction was denied because the merchant is demanding proof of return of the item. The customer either doesn't have proof or just won't provide it. After requesting the proof and not being provided with it we have removed his provisional credit until such time as he can provide the requested proof of return. Our customer is now threatening a lawsuit. Were we wrong to remove the provisional credit? Does the customer have a real case against us?
Answer: 

Reg E error resolution procedures are not concerned with the satisfaction by the consumer for the products or services, it is concerned with whether or not the transaction was authorized. In this case, it was authorized and under Reg E the claim could be denied. Under Reg Z, if the consumer is dissatisfied they may have a claim and liability as low as $50 leaving the rest to fall into your hands. Debit card and zero liability rules can vary, so you would need to compare the transaction itself and its applicability to the rules you are subject to.

First published on BankersOnline.com 6/26/06

First published on 06/26/2006

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