Compliance Question of the Week

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.

Related Links:
12 CFR 205.6 (b)

Commentary on 12 CFR 205.6 (b)

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Around the NW, Compliance News.