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Three’s a Crowd

Question: 
Our customer connected their checking account to a third-party payment app and now claims that a $4,000 ACH debit to their checking account is fraud (money went to the TP). They won’t complete a WSUD so we can’t return the entry. Do we have any recourse?
Answer: 

If the customer admits they set up the TP account and authorized debits from their account to the third-party provider, then this situation likely falls under Regulation E § 1005.14 Electronic fund transfer service provider not holding consumer's account, whereby the customer should work directly with the TP provider. The slightest change in fact could shift this liability and responsibility, so be clear about what your customer is claiming. Might also be worth pulling the T&C for the TP to ensure it’s clearly stated that the customer must report such situations directly, not thru the bank.
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ACH Fraud Investigations and Mitigation

First published on 08/04/2019

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