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Reg E - Stolen Debit Card

Answered by: 
John Burnett

Question: 
We have a customer who gave out his debit card PIN to his caregiver so that the caregiver could make withdrawals on behalf of the customer (the customer was always present at the time of withdrawal). The customer's card was stolen and then used at an ATM for 2 unauthorized withdrawals. Are we obligated to return the funds to the customer? Does Reg E protect the customer even though he gave out his PIN?
Answer: 

The answer is yes to both questions. Even if we assume that the thief is the caregiver (which you have implied, but not said), the PIN has no ability without the card to effect a withdrawal. The card was used to complete the transfers and it was stolen. The Fed has opined officially in writing that a customer's negligence in writing a PIN on a debit card doesn't shift responsibility for an unauthorized withdrawal made with the card to the customer. I see no reason to differentiate your scenario from the one the Fed addressed.

First published on BankersOnline.com 8/27/07

First published on 08/27/2007

Filed under: 
Technology
Filed under technology as: 
ATM
IT
Transfers

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