Consumer goes into a store, buys $40 worth of stuff and pays with her debit card. She asks for the receipt and the cashier swears he gave it to her. She can't find it but shrugs it off because she's not buying anything she'd need to return.

Later she realizes that she was charged $240. So of course the assumption is that the cashier got himself a gift card or something like that at her expense.

Is the extra $200 still considered an unauthorized transaction? I mean she authorized A transaction, but not for that amount.

Her bank is telling her they can't help her because it's not fraud. I think it's still considered an unauthorized transaction but wanted to check before I told her to push it.

She is working with the store but they are being less than helpful and claiming they can't reproduce the receipt or do anything else for her.

Tell her to go to her bank and tell them they need to investigate her claim of error and handle it according to Regulation E or she will sue them and will also inquire about their treatment of other such customers in the contemplation of a class action lawsuit under Section 915 of the law.

The Bank's claim and lack of action is ridiculous.

Even if the bank doesn't want to consider the transaction "unauthorized" since she gave the store the card, they should take a look at Reg E 1005.11(a)(1)(ii) which also defines an error as an "incorrect electronic funds transfer." This situation definitely fits that definition.

VISA/MasterCard also both address this issue in their error resolution procedures.

MasterCard chargeback code 4831 "Transaction Amount Differs"
VISA chargeback code 80 "Incorrect Transaction Amount"

The bank has an obligation under both Reg E and VISA/MasterCard rules to investigate this claim.

Thanks so much to both of you!

If I were the customer, I'd be filing a fraud complaint against the store and its cashier with the local police, too.

I'd put an ad in the local paper and ask people to come forward who have had similar experience at the ABC store. I'm wondering if the bank wouldn't also have some data on that. You think?

To add to John's sentiment....I would also pay a personal visit to the store manager and explain that you aren't going away. The $200 isn't worth the headache he's about to endure. I did this with a Toyota dealer concerning their Run-Flat tire class action law suit a few years ago. We were having trouble with our 1 yr old tires and getting nowhere with the dealer. I did some Googling and found the class action suit pasted all over. I returned to the dealer and asked if he knew about the lawsuit. I got a new set of tires in about a week. It pays to just sit down and talk nice to them sometimes.

Or if you don't want to pay for an ad, just call a small local newspaper with an eager young reporter who will quickly want to dig into the story as soon as s/he hears about it. Give an interview and sit back and watch it all unfold.

I agree completely with Cornhusker's advice to sit down in person with the store manager (if it's a chain, see if you can get a regional manager to sit down with you).

And "speak softly, but carry a big stick"!

People still read newspapers? In Dallas, we'd call Becky Oliver at Fox 4 or Byron Harris at ABC channel 8. I assume your local Fox/ABC/NBC/CBS affiliates have investigative news people, too. Much bigger audience, bigger budget, and you might get on the TV news (for a good reason).

You state that even if the bank does not want to consider the transaction as unauthorized since she gave them the card, it is still an error under 1005.11(a)(1)(ii). Using this same scenario but where the customer notifies the bank more than 60 days after the statement on which it first appears, can the bank consider it as just an error and not as unauthorized? If it is an error than the bank would not have to honor the complaint since it is more than 60 days after the statement was sent, but if it is also an unauthorized transaction then they would have to investigate to comply with 1005.6. If the customer authorized one amount but was charged a higher amount is it unauthorized under 1005.6 or is it just an error under 1005.11?

Anybody care to comment? Can we dismiss a claim of incorrect amount when the claim was made more than 60 days after the statement was sent because it is an error and not an unauthorized transaction?

Hi Frank Ernest,
If the member does not report an error within 60 days after the statement was sent, the financial institution must still investigate whether an error occured during the initial 60 days and refund it and any additional errors that occured within that 60 days. Member liability only applies to the unauthorized transactions that occured AFTER the initial 60 day reporting period, as they are deemed "preventable".

See Section 1005.6(b)(3) which states "the consumer's liability shall not exceed the amount of the unauthorized transfersthat occur AFTER THE CLOSE OF THE 60 DAYS and before notice to the FI, and that the institution establishes would not have occurred had the consumer notified the insitituion within the 60-day period."

k8e- 1005.6(b)(3) only applies to unauthorized transfers. It does not apply to other types of "errors" that are defined in 1005.11(a)(1). So the issue at hand is whether an EFT for an "incorrect amount" is also an unauthorized EFT. If a customer agrees with a telephone sales rep that the company the rep sells for can charge the consumer's account $59.95 on or after the date merchandise is shipped, and the charge comes through for $89.95, it's clearly a "wrong amount" error, right? But is it also an unauthorized transaction, because of the increased amount? Some would say it is. If it is unauthorized, then the requirements of 1005.6 need to be applied to the situation. If not, and the customer missed the 1005.11 deadline, you can deny the claim.

Thanks for the additional info, John. I understand Section 1005.11(a)(1)(ii) to define an error as an "incorrect electronic funds transfer," so the answer to whether an "incorrect amount" is unauthorized/an error, is Yes, it is an error as a transaction amount she did not authorize cleared her account.
However, if a FI determines when investigating a claim that no error occured, that is the reason the claim should be denied, right? I don't think it would matter if the claim was reported after the 60 day time frame?

John, I take your reply to say that it is up to each bank individually to determine if they want to treat it as unauthorized or if they want to deny it because it is an error. Personally, I don't see how this is not unauthorized because the customer never authorized that amount to be charged to their account. I also don't see an examiner agreeing that we can deny it as an error.
Thanks for your reply John.

Let's put it this way -- I can understand that because "unauthorized EFT" is a separate kind of error and the others aren't explicitly described as a form of unauthorized transfer, that a bank might decide that if it was authorized it was authorized, regardless of the amount. I also understand that if you take the more liberal position that a wrong amount is a form of unauthorized transaction, you'll never get criticized.

Didn't the customer have to sign a sales reciept? If she did then she should have noticed the wrong amount being charged.

There's no guarantee in many merchant systems that the sales receipt amount will be the amount that hits the card number when the transaction is finalized. For example, someone has to key in the final amount of a restaurant sale including tip. That happens after the diner has left the building. There's no signed sales draft when merchandise is purchased on the phone.