Answer:
The answers are in section 205.6(b) of Regulation E.
If the transfers are a series of related transfers, and if done with an access device, the customer can keep liability at $50 (or less under Visa/MasterCard rules) if the customer notifies the bank within 2 business days of learning of the loss or theft of the card.
If an access device was used and the customer doesn't notify the bank within 2 business days, liability can grow to up to $500 (including the first $50) if notice is given up to 60 days after the first statement showing one of the unauthorized transactions is made available to the customer.
If the customer doesn't meet the 60 day deadline, liability for transfers made after the 60th day (from statement) may be unlimited.
If no access device was involved, there is no customer liability for unauthorized transfers occurring before the 60th day from the time the first statement showing one of the unauthorized transfers was made available.
Your scenario looks like no access devise was involved. Find the statement that includes the first allegedly unauthorized transfer. Determine when that statement was made available to your customer, and add 60 calendar days. The 60th day is important. Any transfer occurring after that date may be your customer's responsibility.
The regulation requires that you extend the 2 day and 60 day periods reasonably if the customer was prevented from contacting you in time by dint of travel or illness.
First published on BankersOnline.com 11/3/03
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