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Are banks quietly refusing reimbursements to fraud victims?

July 5, 2022

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.

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