Quote:
Originally Posted by Bob from down south
"Except as provided in this section, a consumer incurs no liability from an unauthorized electronic fund transfer. "
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Not long after you posted this Bob, I decided to email the FDIC to get their opinion on the matter. Unfortunately their response not only took a couple weeks, but the response itself was fairly inconclusive.
To begin, my email to them:
Greetings,
I am writing for clarification of FDIC 6500 TITLE IX § 909. (e) and Regulation E Section 205.6, 6(a) 3.
FDIC 6500 TITLE IX § 909. (e)
(e) Except as provided in this section, a consumer incurs no liability from an unauthorized electronic fund transfer.
Regulation E Section 205.6, 6(a) 3.
3. Limits on liability. The extent of the consumer's liability is determined solely by the consumer's promptness in reporting the loss or theft of an access device. Similarly, no agreement between the consumer and an institution may impose greater liability on the consumer for an unauthorized transfer than the limits provided in Regulation E.
Reading through FDIC 6500 Title IX § 909. and Reg. E Section 205.6, my interpretation is that any overdraft fees that may occur if an account is overdrafted due to theft are not covered. That the only covered amounts are the actual unauthorized electronic fund transfers, as long as a person informs the bank within the time allowed.
Though reading through the FDIC Statute and the Regulation E Section noted above, I have to wonder that if a person informs the bank within the time allowed, about unauthorized electronic fund transfers, then both the unauthorized funds and the possible resulting overdraft fees are covered under the laws and they are required by those laws to be refunded to that person.
I am requesting simple clarification on this.
If a person sees unauthorized EFT's and notifies the bank in the required time using the required methods, would that person:
A: Be refunded the unauthorized EFT amount
and be refunded any possible overdraft fees that resulted from the theft.
Or
B: Be refunded the unauthorized EFT amount but
not be refunded any possible overdraft fees that resulted from the theft. And/or any possible refund that person may see for the overdraft fees would be strictly up to the banks decision.
Thank you very much for your time,
berdee
The response I received from them (emphasis mine):
Dear berdee:
Thank you for contacting the FDIC with a question involving Regulation E. The FDIC's Division of Supervision and Consumer Protection (DSC) is responsible for enforcing federal consumer protection laws and regulations at various state-chartered banks. This office is a part of DSC. Non state-chartered banks and other financial institutions are regulated by other agencies.
The situation you describe concerning overdraft fees
is not specifically described in the Regulation. However, the guidance under 205.6 (b) (1) states the consumer's liability is limited to $50 and
appears to relate to the entire effects of the theft. Staff interpretations on Regulation E are available at the following link: <
FDIC Law, Regulations, Related Acts - Consumer Protection>.
Some states may have stricter limitations regarding electronic fund transfers. Therefore, you may want to contact your state's banking regulator to determine if other limitations apply based on state law. Unfortunately, we are unable to provide you with contact information for the applicable state regulator because we are unable to determine which state is involved. Contact information on state agencies is available at
www.usa.gov <
USA.gov: The U.S. Government's Official Web Portal>.
If you wish to file a complaint against a particular financial institution, we need the complete name and location of the involved bank. We will then be in a position to assist you or refer your complaint to the appropriate regulatory agency that can provide assistance.
We hope this information is helpful. As part of our ongoing efforts to improve our service to the public, we would appreciate it if you would complete a short questionnaire on the level of service you received from this office. The questionnaire form can be accessed at <>.
Sincerely,
<name withheld>
Federal Deposit Insurance Corporation
Division of Supervision and Consumer Protection
Consumer Response Center
2345 Grand Boulevard, Suite 100
Kansas City, MO 64108
1-800-378-9581
Fax number 703-812-1020
Here is 205.6 (b) (1) that was discussed in their email:
6(b) Limitations on Amount of Liability
1. Application of liability provisions. There are three possible tiers of consumer liability for unauthorized EFTs depending on the situation. A consumer may be liable for (1) up to $50; (2) up to $500; or (3) an unlimited amount depending on when the unauthorized EFT occurs. More than one tier may apply to a given situation because each corresponds to a different (sometimes overlapping) time period or set of conditions.
"the guidance under 205.6 (b) (1) states the consumer's liability is limited to $50 and
appears to relate to the entire effects of the theft." ... I don't see it where it
appears to relate to the entire effects. *shrug*
Anyway, the issue is not specifically addressed in the Regs and to them it only appears (to possibly) be covered by that statute. So, I would imagine that basically it may fall under state laws and/or it may just be up to the bank to make the decision to refund any fees.
I am not posting this to start it back up with you Bob. My main objective in posting it is that
if someone, who is reading this, is having to fight their bank to have the fees covered, they can use the info in the email to help them in looking up their states laws, file a complaint with the FDIC, etc.
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