Compliance Question of the Week
October 10, 2011
October 11, 2011
If our members write their personal identification number (PIN) on their debit cards, and thieves use the PIN to take money out of the account, do we still have to pay even though the members’ own negligence caused the loss?
Yes. As unfair as this may be, the Commentary to the Electronic Fund Transfers Act says that “negligence by the consumer cannot be used as a basis for imposing greater liability than is permissible under Regulation E.” The commentary goes on to specifically give “writing the PIN on a debit card” as an example of negligence.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.