Compliance Matters

Compliance Q&A: Debit Card Disputes

Can a credit union reject a member’s debit card dispute if he wrote his PIN on the card’s back before it was lost or stolen?

April 25, 2013

Q. Can a credit union reject a member’s debit card dispute if he wrote his personal identification number (PIN) on the card’s back before it was lost or stolen?

A. No. The Official Staff Commentary to Regulation E [Comment 1005.6(b)-2] states: “Negligence by the consumer can’t be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, doesn’t affect the consumer’s liability for unauthorized transfers.”

Q. Are credit unions required to send nonsufficient funds (NSF) notices to members each time they overdraw a share/share draft account?

A. No. Although many institutions provide NSF or overdraft notices as a matter of practice, providing the notice is a courtesy, not a regulatory requirement. Providing the notice also might be considered a loss control measure, because it serves as a red flag for possible errors and unauthorized items. (Don’t confuse this with the Reg E overdraft notice that credit unions provide members to opt-in to their overdraft service for ATM and onetime debit card transactions.)

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