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Phone Stolen, Fraud Charges: Reg E?

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Question: 
A customer's phone was stolen, and because the debit card was on file with the phone company, the fraudulent charges were automatically applied to it. The customer is now wanting to file a dispute with us (the bank) to receive his money back ($200). How is this handled under Reg E and VISA? Should I file it as a VISA? Do I need to provide provisional credit, or does he need to take it up with his cell provider?
Answer: 

Your customer provided the wireless service provider an authorization to use the card. That authorization may be valid, even if it was not given in writing (see Comment 10(b)-7 in Regulation E's Supplement I). I don't think you have a Regulation E claim, but Visa rules may permit a recovery. In addition, your customer may have success taking the problem up directly with his wireless carrier, particularly if he promptly notified the carrier of the theft of his phone.

First published on BankersOnline.com 10/25/10

First published on 10/25/2010

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