[jeffcumbee]

So, here is the situtation. We have a customer who recently inherited funds from the death of a parent. The customer has blown through nearly 200K in a year. At this point the money is all gone and the customer has decided that some debit card transactions were not theirs. Most of the transactions are from Itunes and Microsoft. The transactions total about 2K. The customer has had many transactions from these merchants over the last year, but has now decided the last two months transactions were “not authorized”. Under Regulation E, can we deny the customer’s claim based on the past transactions, and the circumstances of the customer blowing the inheritance? If so, is there a citation that would affirm this? Are we bound by regulation E to conduct an investigation (which we can’t complete within 10 days) and provisionally credit the customer? I am fairly confident that if we provisionally credit the customer, they will take the money and run! Any thoughts?

[rcooper]

I am not aware of any provision in Regulation E that would allow you deny investigating the claim. I suggest you make an effort to complete the investigation within 10 business days. You may also want to look at when the customer notified you of the transactions which may affect their liability. Here is a link to a Fed guide that gives a good overview of the requirements: https://consumercomplianceoutlook.org/2012/fourth-quarter/error-resolution-procedures-consumer-liability-limits-unauthorized-electronic-fund-transfers/.

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