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Unauthorized or Chargeback?

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Question: 
A cardholder let's, lets call him Grandson A, use grandma's card to make a Temu purchase. Her other grandson, B, never had authorization to use the card. Grandma begins to get unauthorized or unfamiliar charges from Google and CashApp on her account. She states she thinks Grandson B took her card out of her purse, made the transactions, and placed the card back. Are we able to file a chargeback on the charges based off the her assumption that Grandson B took the card info?
Answer: 

You obligation to investigate under Regulation E is separate from your ability to utilize the chargeback process in an attempt to recover funds from the merchant. The fact that one grandchild was given authorization to use the access device does not provide carte blanche for another grandchild to use the access device.

Your Regulation E investigation will have to determine whether the consumer initiated the electronic funds transfers or if they gave authority to the individual who did as noted in the definition of an unauthorized transfer in 1005.2(m).

Your chargeback rights are based on the method of authorization and Visa/Mastercard chargeback rules. Many online purchases have chargeback rights for fraud. However, charge backs rights are often limited to transactions greater than $25 and also exclude merchants that process transactions using tokenization or EMV 3-D Secure programs.

First published on 11/26/2023

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