Reg E - 60 Day Statement Guideline

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Question:

I have a debit card dispute on 52 transactions (all from the same merchant) with dates ranging from 9/26/10 thru 11/21/10. This customer states that the merchant contacted her about the possibility of fraud on 11/19/10. On that same date, she contacted our bank and had her card cancelled. She did not file a dispute with us until 1/26/11 because she claims she has been working with this merchant to resolve the dispute. My question is, what date should be used in determining the 60 day statement guideline for provisional credit? Should we consider 11/19/10 as the notification date, or 1/26/11?

Answer:

You really have two questions here.

First, was your customer's notice of her claim timely enough to satisfy the Section 205.11 rules. The 60-day period starts with delivery of the statement on which the alleged fraudulent EFT appears. Do you know whether your customer said anything about particular transactions being unauthorized when she contacted your bank on November 19? If she did, that was when she made her claim, and you can determine if it's within 60 days of the applicable statement dates.

If she didn't mention unauthorized transactions to the bank until 1/26/11, that's the date of her claim and you can determine for each claimed item whether more than 60 days elapsed from the item's statement date. For example, if statements are delivered to your customer on the 30th of each month, the fraudulent transactions appearing on the 9/30 statement (the earliest of the problem transactions) would be covered by Section 205.11 if she made her claim in November, but not if she didn't make it until January 26. Items on her October 30 statement would not be covered, either under Section 205.11 if she made her claim in January. But the November statement items would.

That only determines what you have to follow Section 205.11 rules on (including provisional credit).

Assuming the worst, that the bank finds that all the transactions were not authorized by your customer, what would she be liable for? It's not a lost or stolen card situation, apparently, so the bank would be on the hook for all the transactions since all would have occurred before the end of the 60-day period following the first statement showing one of the items.

Start working your MasterCard or Visa chargeback, etc., rules so that you can recover at least some of the funds.

First published on BankersOnline.com 1/31/11