Answer:
The Reg. E liability tiers under 205.6 will take effect and it depends on when unauthorized withdrawals occur and in what amounts.
Generally there are 3 tiers, 1) timely notification (customer notifies you w/in 2 business days) they are liable up to $502) Non timely, after that two days they could be liable up to $5003) After statements have been sent for 60 days, the customer could have complete liability for those after that period.
The trick is having them admit when they actually knew of the loss and why they waited to notify you. Also, extenuating circumstances can alter the liability, robbery, hospital stay, etc.
First published on BankersOnline.com 12/15/03
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