Unauthorized Use of Prisoner's ATM Card

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Question:

This question is in regards to Reg E and a claim of unauthorized use of an ATM card. Our customer claims that their wallet with their ATM card and PIN was stolen while they were incarcerated. The customer alleges that they was incarcerated "sometime in June" and released in December. They are calling now, in January, claiming that they just discovered that the transactions had taken place. Can we send him a letter stating that he did not respond within the appropriate time frame and is therefore liable for the transactions?

Answer:

There is no "appropriate time frame" that makes a customer liable for unauthorized electronic funds transfers. You must comply with the error resolution procedures of Section 205.6. You will want to specifically study the requirements in Section 205.6(b)(2) and (3) - Timely Notice Not Given, if you believe the customer knew the errors occurred and didn't notify you.

First published on BankersOnline.com 2/19/07