Compliance Q&A: Debit Card Charge Disputes

Question: We have a cardholder who gave her boyfriend her debit card to hold onto for her. He ended up making some purchases and now she is calling the bank to see if she can dispute these items? She never gave him permission to use the card, but did give him the card to hold onto for her. Would this be something she can dispute as unauthorized? Or because she gave her card to her boyfriend, even just to hold onto, would this be authorized under Reg E?

Answer: If the cardholder did not give permission to make transfers, then it would most likely be considered unauthorized if the boyfriend did actually use the card to make a transfer. The consumer would only be liable for the transfer if the consumer granted the authority to specifically make transfers and furnished the access device. Authority. If a consumer furnishes an access device and grants authority to make transfers to a person (such as a family member or co-worker) who exceeds the authority given, the consumer is fully liable for the transfers unless the consumer has notified the financial institution that transfers by that person are no longer authorized.

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