Skip to content

Grounds to Deny 3rd ATM Withdrawal Fraud Dispute

Answered by: 

Customer filed a 'fraud' dispute for an ATM withdrawal that was processed as Chip and PIN and they have always had possession of their card. This is the 3rd 'fraud' dispute filed this year for ATM withdrawals where the card was always in their possession (previous disputes were on an non EMV card). They have also filed 4 other 'fraud' disputes this year for various other merchants. With new 'fraud' dispute being for a transaction that was processed as Chip and PIN and the customer always had possession of their card, do we have any grounds to deny the dispute?

Since the commentary to Reg E 1005.6 allows for the fact that a consumer could write their PIN on the card and still not be liable for unauthorized transactions. The mere presence of Chip and PIN is not sufficient evidence to conclude that your customer authorized the transactions. There could be a family member or friend performing shoulder surfing and obtaining the PIN and later taking the card and putting it back, or the customer could be engaged in a card cracking scheme and giving the card away in exchange for payment and later claiming fraud. There is not enough evidence to make a determination.

Regardless of the number of claims a customer has made, Reg E requires that we investigate and determine whether or not a the customer authorized the charge. We may attempt to obtain video surveillance, copies of receipts, review transaction patterns or undisputed claims, etc.

The operational question here is, "Why does this person still have a card?" A debit card is a privilege, not a right, and the bank may be well advised to limit this customer's opportunity to cost the bank additional money.

First published on 10/15/2017

Filed under: 
Filed under compliance as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics