Visa Debit Card ATM Fraud - Reg E or Visa Rules?

Answered by:

Question:

I am Controller at a large financial institution. Under Reg E, if someone claims fraud on a Visa debit card ATM withdrawal transaction does the $50 initial liability provision of Reg E apply or is does Visa's zero liability? Debit card was used as an ATM card.

Answer:

Visa's zero liability policy does not cover ATM transactions. It only covers purchase transactions by a consumer, when those transactions are routed via the Visa network. In most cases, that means it has to be a signature-based debit card merchant purchase.

Regulation E's provisions will always apply to a consumer transaction with a debit/ATM card. Whether Visa's rules will provide added protection to the consumer will depend on the type of transaction involved.

First published on BankersOnline.com 1/16/06