Hello,

Got a written dispute, where the customer is claiming the ATM dispensed a fake $20 bill and a fake $50 bill... How is this possible? Would this be covered under REG E?

ATM ledger shows in balance, and funds dispensed correctly..

Does he still have the bills?? I honestly don't know the answer to your questions.

No, he said he "threw them away" - ATMs check for the magnetic ink patterns and have other security features that can determine if bills are fake. I highly doubt the ATM had fake bill.

Not sure if REG covered this or not.. can't see anything with this type of issue.

We order the cash for our ATMs and the funds for the order go to our armored car service where all bills are verified in the order before being placed in the ATM. There is dual control on the cash throughout the whole system. If your replenishment works the same way, it is virtually impossible to have had two fake bills. I don't think Reg E applies but that is just my opinion.

Whether or not this is specifically covered under Reg E, you have already applied Reg E standards, assuming you started asking your questions upon notification of the "error." As a matter of caution I would suggest treating it with Reg E time frames, but this is one I would feel comfortable denying.

1) No errors on your ledger
2) ATM in balance
3) Your customer doesn't have the fake bills (besides - who would "throw away" suspect bills?)

I would assume you also reasonably verify your bill before placement in your ATM? If so there's another point.

Send the dispute letter with your documentation and close the dispute.

mirror what Burkemi says, but i would include in my letter that we are closing their account and they can come to any location to get a cashier's check for the balance of the account, or one will be sent 30-days from the notice of this letter to their address if they don't come in prior.

While chances are slim, something like this actually happened to a customer a few years ago. They were at a bank that had just installed a new ATM, the ATM vendor left test money in the machine and it went live. I guess our customer was the first to use it and it spit out the test money, labeled with the ATM manufacturer name (I can't remember if it said "Diebold" or whatever on it). I did not believe the customer when they contacted us, but they went right into that bank and the bank acknowledged that it happened. But instead of making things easy on the customer (or us) by just exchanging the test money for real money, they said he had to file a dispute with us.

stupid question - your ATMS dispense $50's?
The ones in my area (Philadelphia) dispense either $10 and $20 bills or just $20 bills.

we have some that are $10 & $20, some that are $20 only, and a very few (less than 5% of total # of machines) that are $20 & $50 (higher net-worth areas).

Our machines are 10, 20, and 50

My bank has at least one machine that can dispense any whole dollar amount (it has $50, $20, $5 and $1 bills). You can accept the machine's decision or set your own denominations (IMHO it's good it's a low traffic machine). The rest of their machines that I'm familiar with only dispense $20s.

Many years ago there was a bank with a branch in Mashpee (next town to the west) that could dispense exact amounts to the penny. I cannot imagine servicing such a Rube Goldberg contraption.