Answer:
For nonReg. E liabilities, you will have to look at the debit card rules for those nonPIN based transactions and verify when those rules took effect as compared to the transactions.
Divide the claim amounts into debit card and Reg. E. Now you'll know your limits. If most of the loss is say, in debit cards, and you decide those have to be paid, the Reg. E limits may be moot.
As to the Reg. E limits, had he actually reported it when he said he did, there would be a $500 max liability.
You will have to evaluate your relationship with the customer, its value and your standard procedures.
How much do you want to keep the customer? Refusing the claim may lose the depositor and prompt a complaint to your regulator.
Do you believe that his call could have gone unrecorded? If that is highly unlikely because you have always handled claims in the XYZ manner and there have been no other complaints, you may want to stand by your contention that the claim was not made, and that making it now places the liability on him, at least for the Reg. E amounts.
I would also document why he says he is making this claim now. Quite a lot of time has passed and this reduces the validity of his claim.
First published on BankersOnline.com 5/06/02
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