There are some scary reports popping up that various major financial institutions no longer credit back all fraudulent transactions, even when victims file a police report. If true, it’s a disastrous move that will painfully hurt the institutions.
“Under a 1978 federal rule called Regulation E, banks are required to make clients whole if their money is stolen from a consumer account through an electronic payment initiated by another person. Since Reg E was written well before payment apps existed, the Consumer Financial Protection Bureau last year issued guidelines saying that the law covered all person-to-person online payments. The bureau clarified that all unauthorized online money transfers — meaning any payment initiated by someone other than the customer and done without the customer’s permission — were the bank’s liability.
