Fraud using MasterCard SecureCode

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Question:

Our processor says we don’t have chargeback rights since a debit card purchase was made using MasterCard SecureCode. Can we deny the claim since the cardholder’s password was used?

Answer:

Reg E does not permit claims to be denied in cases of customer negligence. If the customer’s SecureCode password was hacked, stolen, or phished, the customer still has a valid claim under Reg E regardless of whether or not the bank has chargeback rights.

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