I'm been handed the Reg E files and I'm trying to get the hang of the timing requirements and the customer liability (been away too long!)

Our customer disputed 2 POS transactions - $400.00 and $351.88, both 5 days after transactions were posted to the account.

Investigation showed that because the card and PIN were present, there are no chargeback rights and our provisional credit was reversed in full. We have Secure Debit which covers some instances of Fraud and the claim was eventually paid in full, less the $50.00 'deductible', and the customer was credited for $701.88.

My question(s) - 1)Had we not enrolled in Secure Debit, what would the customer's liability be? and 2) Does the provisional credit have to stay in place while the Secure Debit investigation continues or is that a separate step in the process?

Thanks for any input.

1. I'm not familiar with "Secure Debit" but whether or not the bank was paid back for the transactions has nothing to do with whether or not the customer is liabile for the charges. Just because card and PIN were present does not mean that your customer authorized the charges are cards can be counterfeited, phished, skimmed, stolen with the PIN written on them, etc. With or without Secure Debit your customer's maximum liability would be $50.00 if the transactions are the result of a stolen card and the customer reported the theft of the card within two business days of the date the discovered the card was stolen.

If the card was not stolen but was in fact counterfeited, then you cannot use this liability schedule and as long as the customer notifies you within 60 days of the statement date that the first charge appears, they have $0 liability.

The only way the customer is liabile for the charges is if your investigation determines that they actually did them.

2. You can only reverse the provisional credit if you have completed your investigation and denied the customer's claim. Based on your decription of continuing your investigation using Secure Debit, it was improper to reverse their provisional credit as you had not completed your investigation.

Thank you. And if the theft was reported after two days, the customer's liability is defined in 205.6(b)2(ii), yes?

And remember - it's two days after the customer learns of the theft/missing card, not two days from the transaction.