Customer claims thousands of dollars in unauthorized ATM withdrawals in Mexico. Review of account shows that for the past 3 years' these same transactions have taken place. Customers live in Mexico for the winter and make frequent withdrawals at various ATMs. Now all of a sudden, these are unauthorized..... can we deny the claim based on our internal investigation? (And yes, I am registered for Brian's class next week)

Thanks!

First, I hope that you find next week's program helpful. Second, I can guarantee that you will not like my answer.

The fact that a customer has made withdrawals in Mexico in the past does not mean that all future withdrawals in Mexico are automatically authorized. We must also consider the fact that the card could have been skimmed and duplicated, or it could have been lost with the PIN # written on the back, or the customer could have been a victim of "shoulder surfing" and then pick-pocketed after the theif watched them enter the PIN at an ATM.

Questions we need answers to in order to determine customer liability:

1. Was the card lost/stolen?
2. Did they loan the card/give the PIN # to anyone else?
3. If the card was lost/stolen, when did they discover the card missing?
4. If the card is not lost/stolen, were legit withdrawals made using the card in between disputed transactions.

I acknowledge the difficulty of trying to conduct an invetigation when the alledged fraud took place in Mexico...it is unlikely that you will be able to obtain video to see if your customer is making the withdrawals, law enforcement propbably has bigger issues to worry about than to help a U.S. bank recover a few thousand $$.

The answer to the cardholder's liability may unfortunately rest on their answers to the above questions.

If you do end up absorbing a loss, and you believe the customer contributed to it, remember that you are under no obligation to give the customer another card.

Just curious - when you say the same transactions, are you saying there is an identifiable pattern (locations, amounts, frequency, etc.) to match the previous authorized transactions? Or did you mean similar?

Thank you both... No the card was not stolen or shared with anyone. Yes, there are a few legit purchases at merchants, but they claim the ATM usage is unauthorized. We inquired about the past ATM withdrawals and they do not claim these as unauthorized... Pretty strange that for 3 years they regularly hit the ATM 4 times a week (3-4 hundred dollars each time), and now are claimt ing unauthorized for the last two months.

Bobby-- Yes there is an identifiable pattern. Same locations, dollar amounts, frequency.

Thank you both... No the card was not stolen or shared with anyone. Yes, there are a few legit purchases at merchants, but they claim the ATM usage is unauthorized. We inquired about the past ATM withdrawals and they do not claim these as unauthorized... Pretty strange that for 3 years they regularly hit the ATM 4 times a week (3-4 hundred dollars each time), and now are claimt ing unauthorized for the last two months.

Bobby-- Yes there is an identifiable pattern. Same locations, dollar amounts, frequency.

Pattern of behavior can be a reason to deny a claim, albeit a weaker one. Unlike a court of law, Reg E does not require "proof beyond a resonsable doubt" for you to deny a claim. The fact that the card is not reported as stolen leaves three possible conclusions that can be drawn.

1. The cardholder is lying.
2. Someone the cardholder knows has watched them perform the withdrawals in the past and they have taken the card, used it, and replaced it without the cardholder's knowledge.
3. The card was skimmed, and copied, and the crooks have duplicated the cardholder's withdrawal pattern hoping that the fraudulent withdrawals would blend in with legit ones thus prolonging their ability to drain the account.

Any chance any of these ATM's have cameras. On a few occasions, I was able to indicate that we were attempting to get pictures and suddenly the customers withdrew the claims.