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Reg. E Procedure for Stolen ATM Card

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Question: 
A customer had her ATM card stolen and claims the PIN was not written on the card and that it could not be easily guessed. There were two withdrawals done at a foreign ATM before she notified us (same day just a few hours later). The transaction journal showed no invalid PIN attempts. She filed a police report and the police dept. was able to retrieve photos. We issued her provisional credit within the time frame as per Reg E. We have contacted her to view photos but she has made excuses not to come in. Even though the photos clearly show she is not the one who did the withdrawals, can we hold her liable for the $50.00 since there were no invalid PIN attempts and she's no longer being co-operative in helping to identify a possible suspect?
Answer: 

Whether or not you can hold her liable for the $50 has nothing to do with invalid PIN attempts or consumer cooperation, and everything to do with timing.

The $50 limit on cardholder liability for unauthorized EFTs applies to transactions occurring before the consumer notified you of the theft of her card, if she made the notification within two business days of learning the card had been stolen. The key timing question is: When did the consumer realize her card had been stolen? That date is "Day 0." The next business day (as defined in Regulation E) is "Day 1," and the following business day is "Day 2." If she notified the bank at any time before midnight on "Day 2," she's responsible for up to $50 of any unauthorized transactions made before she notified you.

Your question is unclear as to whether she notified you just a few hours after the two ATM withdrawals, or the ATM withdrawals occurred a few hours after she notified you. If they occurred after her notice to the bank, she's not liable for anything.

First published on BankersOnline.com 5/23/11

First published on 05/23/2011

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