Retail Banking Expertise

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JGoodish

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JGoodish
Does anyone have expertise with consumer banking regulations? I'm just curious about the veracity of what I'm being told by my bank, as they have been unable to substantiate it so far.

I filed a dispute on a small charge with my bank for a product/service procured using my debit card. After a couple days, with no detail requested from me, I received a letter saying that the dispute was denied. When I questioned this, I was first told that it was extremely difficult to dispute a PIN-based transaction because it was unlikely to be fraudulent (in this case, I paid first and the service wasn't subsequently delivered). I then asked whether it would be different if the debit card was swiped as a credit card, and was told no, because the account the card is tied to--in this case, a checking account--determines the regulations which govern it (this makes sense).

However, it was obvious that the bank never conducted an investigation before deciding to decline the dispute. The bank has not denied this, claiming that they were prohibited by Regulation E from even pursuing a dispute since the transaction was for a "service." When I countered that I had successfully disputed a service transaction on the same account in the distant past, the bank then said that this time was different because it was a "salon-related service" and salons have special accommodations in Regulation E. I then requested a citation of that accommodation, which I have not yet received (they first told me to "Google it".) BTW, it is a fairly wide stretch to classify this merchant as a "salon" or providing "salon-related services," though I could see the merchant making such a claim.

One thing that Google did seem to turn up is the bank's responsibility to fully investigate a dispute. I'm not sure how they could do that without requesting more information from me on the reason and justification for the dispute, which they did not do.

Since Regulation E and the fact that this was a debit card account was cited as a reason why they couldn't pursue the dispute process, I then asked them what would have happened if this had been a credit card account. They said that falls under different regulations, but that they probably still wouldn't have pursued the dispute. That kind of suggests to me that they're lazy or there's an undisclosed conflict of interest with the merchant.

So, I'm just trying to cut through the mess and figure out where the truth of the regulations lie. I've filed maybe a half-dozen disputes on various card accounts over the past 20 years, and this is the first one which I can recall that was not investigated. I'm not looking for ways to argue with the bank, but rather understand the limitations of consumer protections while using a debit card account vs credit card account.

Thanks,
JKG
 
azblackbird said:
That's one reason why I never use debit cards. They offer no protection (or very little) against disputes. Banks love debit cards. That's one of their biggest revenue sources.
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Was one. Part of the Dodd Frank act actually curtailed that for larger banks (smaller banks are exempted).

There are multiple rules and regulations which can come into play. Generically debit transactions on the ATM networks folow Reg E for electronic transactions. Under those rules you did authorize the transaction, so the bank is required to pay it. It is effectively treated like a cash transaction. You dispute directly with the merchant.
A debit card with a Visa/MC logo on it, and used as a credit card transaction. The merchant is liable to guarantee the service is provided. Hence you can dispute them, and have them removed.

The difference between a check/debit card and a credit card when both are on the credit card network is more about what the bank has in policy, than regulatory difference.

Not a lawyer, but I work in the payment industry.

Tim

Sent from my LG-H631 using Tapatalk
 
Stewartb said:
You paid up front. How is that the bank's problem?
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Where did I say that it was? If you're not familiar with the requirement to pay in advance for services, you must not visit a doctor's office very often. It's become quite routine, though not completely universal. The merchant has an obligation to follow through on delivery, and the bank has an obligation to investigate situations brought to its attention where that does not occur or may not have occurred. How "smart" you think it is or isn't to pre-pay is irrelevant to the issue.


JKG
 
tspear said:
There are multiple rules and regulations which can come into play. Generically debit transactions on the ATM networks folow Reg E for electronic transactions. Under those rules you did authorize the transaction, so the bank is required to pay it. It is effectively treated like a cash transaction. You dispute directly with the merchant.
A debit card with a Visa/MC logo on it, and used as a credit card transaction. The merchant is liable to guarantee the service is provided. Hence you can dispute them, and have them removed.
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This information is helpful. Even though it makes sense that the type of account (i.e. checking) could govern the regulations pertaining to the card, I was under the impression that the type of transaction was more relevant to consumer protections (i.e. run through MC/Visa network vs. PIN-based). Your information appears to confirm the latter.

As for the bank, without being too specific let's just say that it is a top 10 big bank. This same big bank gave me the runaround a few months ago when I called their toll-free number to ask a question about my account, so at this point I am officially annoyed with their customer service. Yes, I would likely get better answers and attention at a small bank/FCU, but many of them are still playing catchup on the technology side (e-bills, atm networks, etc.). Perhaps it's time to re-evaluate the landscape.


JKG
 
Walboy said:
I don't have dental insurance. My dentist offered a 10% cash discount which at one time they accepted a debit card. A couple of visits ago while trying to get the discount, the debit card wasn't allowed for the discount...only hard currency cash. No checks either. The receptionist said trying to collect payment from some patients ate up the discount and then some. If you pay with a check or debit card, it's full price now.
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My doctors and dentist have mentioned similar challenges. Pre-payment is now required, because too many folks receive services and then skip out on the bill. Insurance used to be the safety net, but with escalating deductibles for many insurance plans, providers can no longer rely on receiving any reimbursement apart from the patient. So they get it up front. This seems to be most common with smaller, independent providers who don't have an army of people to chase after payment.


JKG
 
JGoodish said:
This information is helpful. Even though it makes sense that the type of account (i.e. checking) could govern the regulations pertaining to the card, I was under the impression that the type of transaction was more relevant to consumer protections (i.e. run through MC/Visa network vs. PIN-based). Your information appears to confirm the latter.

As for the bank, without being too specific let's just say that it is a top 10 big bank. This same big bank gave me the runaround a few months ago when I called their toll-free number to ask a question about my account, so at this point I am officially annoyed with their customer service. Yes, I would likely get better answers and attention at a small bank/FCU, but many of them are still playing catchup on the technology side (e-bills, atm networks, etc.). Perhaps it's time to re-evaluate the landscape.


JKG
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Yes, it is. Most credit unions offer all of those things now. As far as I'm concerned, they've pretty much made banks obsolete for the vast majority of individuals. More and more credit unions are also offering business services. I suggest that you look around for a local CU and ask questions. There are also CUs that may not be in your immediate area, but effectively accept anyone who makes a small contribution to any of various charities they've hooked up with.

Most (but not all) credit unions also participate in "shared branch banking," which means that you can perform most routine transactions at any participating credit union, not just your own. Most are also participants in the Co-Op ATM network, which allows you to use your plastic at any participating CU without incurring fees.

As far as banks are concerned, if you're a veteran and don't need business services, USAA bank is hard to beat. Small community banks also tend to be less horrible than the "big" banks. Most brokerage houses also offer Cash Management checking accounts these days if you also have brokerage accounts with them.

Rich
 
Walboy said:
I don't have dental insurance. My dentist offered a 10% cash discount which at one time they accepted a debit card. A couple of visits ago while trying to get the discount, the debit card wasn't allowed for the discount...only hard currency cash. No checks either. The receptionist said trying to collect payment from some patients ate up the discount and then some. If you pay with a check or debit card, it's full price now.
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Smart Dentist.

RJM62 said:
Yes, it is. Most credit unions offer all of those things now. As far as I'm concerned, they've pretty much made banks obsolete for the vast majority of individuals. More and more credit unions are also offering business services. I suggest that you look around for a local CU and ask questions. There are also CUs that may not be in your immediate area, but effectively accept anyone who makes a small contribution to any of various charities they've hooked up with.

Most (but not all) credit unions also participate in "shared branch banking," which means that you can perform most routine transactions at any participating credit union, not just your own. Most are also participants in the Co-Op ATM network, which allows you to use your plastic at any participating CU without incurring fees.

As far as banks are concerned, if you're a veteran and don't need business services, USAA bank is hard to beat. Small community banks also tend to be less horrible than the "big" banks. Most brokerage houses also offer Cash Management checking accounts these days if you also have brokerage accounts with them.

Rich
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Around here, the larger CUs have been doing everything banks do, and far cheaper and with less overhead and fees, for decades. Three decades or so ago, you had to do some specific job or have some access to them (usually by your job type) but nowadays, all the good ones will take anybody.

I almost feel bad for anyone who has to use a commercial bank for whatever reason. Just lining some banker's pockets. Yeah, the CUs pay their execs well, no doubt... but you're not paying for someone's dividend or stock growth on Wall Street just to use them as your banker.
 
I make all purchases on the Citi Double Cash card, paying the balance each month. That essentially gives me a no-hassle and perpetual 2% discount on everything I purchase, with the protection afforded by a true credit card.

I bank at a national credit union with no local brick-and-mortar, and I do have an open but dormant BoA account that I have used a couple times if I need a large cashiers check in short order.
 
denverpilot said:
Around here, the larger CUs have been doing everything banks do, and far cheaper and with less overhead and fees, for decades. Three decades or so ago, you had to do some specific job or have some access to them (usually by your job type) but nowadays, all the good ones will take anybody.
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I can't speak for CO, but in my area the CUs and small banks have been way behind on everything except perhaps in-branch customer service (but I rarely ever go inside a branch). They don't have the ATM network, they don't have the same online banking capabilities (such as bill presentment), they don't do their own credit card processing, they don't have extended hours of support so when you're traveling and have an issue you can reach someone, and finally, their savings interest rates most often decrease with increasing balances and their fees are often more (especially around the use of "foreign" ATMs.). Many of them have caught up in those areas, but they almost always do it by outsourcing services rather than doing them in-house. That's fine, except when you call a support number and get someone at a big outsourcing company who provides the same lousy service as the big bank, only they care even less since you aren't their customer. I also don't like the fact that many CUs and small banks address the ATM network problem by signing with Allpoint or other "convenience store" ATM networks, where transactions are more likely to get botched and cards more likely to get skimmed. I moved to the big bank from a small bank, and have first-hand experience with all of the above.

I don't mean to beat up on CUs or small banks, because I've used them for things (such as a mortgage) that I will likely never again source from a big bank. I'm just trying to point out that they're not all sunshine and roses.

As for big banks, they typically pay everyone pretty well for the jobs that they do (I used to work for one, albeit an investment bank and not a retail bank). I also don't have a problem with their profits being returned to shareholders, because I am one.


JKG
 
That does not match my experience with the larger CUs. I use Alliant.
 
JGoodish said:
I can't speak for CO, but in my area the CUs and small banks have been way behind on everything except perhaps in-branch customer service (but I rarely ever go inside a branch). They don't have the ATM network, they don't have the same online banking capabilities (such as bill presentment), they don't do their own credit card processing, they don't have extended hours of support so when you're traveling and have an issue you can reach someone, and finally, their savings interest rates most often decrease with increasing balances and their fees are often more (especially around the use of "foreign" ATMs.). Many of them have caught up in those areas, but they almost always do it by outsourcing services rather than doing them in-house. That's fine, except when you call a support number and get someone at a big outsourcing company who provides the same lousy service as the big bank, only they care even less since you aren't their customer. I also don't like the fact that many CUs and small banks address the ATM network problem by signing with Allpoint or other "convenience store" ATM networks, where transactions are more likely to get botched and cards more likely to get skimmed. I moved to the big bank from a small bank, and have first-hand experience with all of the above.

I don't mean to beat up on CUs or small banks, because I've used them for things (such as a mortgage) that I will likely never again source from a big bank. I'm just trying to point out that they're not all sunshine and roses.

As for big banks, they typically pay everyone pretty well for the jobs that they do (I used to work for one, albeit an investment bank and not a retail bank). I also don't have a problem with their profits being returned to shareholders, because I am one.


JKG
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Banking in Colorado took a detour down the "no branch banking" path. It caused some weird business structures for the big banks so consumers were used to limited services. As credit union membership laws were relaxed and banking failures became commonplace lots of consumers moved to credit unions. When branch banking was legalized the big banks went nutzo particularly in mortgage lending. Most of that has been curtailed. Most of the cowboys now are mortgage brokers. Customer service is hit-n-miss with reputations on the street providing some guidance.
 
asechrest said:
That does not match my experience with the larger CUs. I use Alliant.
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Me too -- they're great. Not a lot of physical branches, but I haven't been to one in years. Deposit checks with your phone, you can use any CU Co-op ATM for free, and they'll reimburse the ATM fees for any other ATM (up to 4 times a month or something). Car rates are competitive. Mortgage rates are about the same as anywhere (probably because mortgages rates are controlled more by Fannie-Mae/Freddie-Mac/etc).
 
denverpilot said:
Smart Dentist.



Around here, the larger CUs have been doing everything banks do, and far cheaper and with less overhead and fees, for decades. Three decades or so ago, you had to do some specific job or have some access to them (usually by your job type) but nowadays, all the good ones will take anybody.

I almost feel bad for anyone who has to use a commercial bank for whatever reason. Just lining some banker's pockets. Yeah, the CUs pay their execs well, no doubt... but you're not paying for someone's dividend or stock growth on Wall Street just to use them as your banker.
Click to expand...

I don't feel sorry for banks, and I don't care that they make a profit. That's what businesses are supposed to do. I do care that they've repeatedly thrust the country and the world into financial chaos, however, and then ran hat-in-hand looking for bailouts from Uncle.

Rich
 
RJM62 said:
I don't feel sorry for banks, and I don't care that they make a profit. That's what businesses are supposed to do. I do care that they've repeatedly thrust the country and the world into financial chaos, however, and then ran hat-in-hand looking for bailouts from Uncle.

Rich
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Just think. Now they want to do this...

http://www.nbcnews.com/business/con...offers-restaurants-10-000-go-cashless-n782276

http://www.cnbc.com/2017/07/14/visa-business-incentive-us-uk-war-on-cash.html

I'm sure it's all for the customer's good... LOL.
 
ColoPilot said:
Me too -- they're great. Not a lot of physical branches, but I haven't been to one in years. Deposit checks with your phone, you can use any CU Co-op ATM for free, and they'll reimburse the ATM fees for any other ATM (up to 4 times a month or something). Car rates are competitive. Mortgage rates are about the same as anywhere (probably because mortgages rates are controlled more by Fannie-Mae/Freddie-Mac/etc).
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Plus 1.11% APY savings account, 0.65% APY checking account (no reductions for high balances as far as I'm aware), 24 hour US-based customer service, billpay, slick mobile app, etc.
 
asechrest said:
Plus 1.11% APY savings account, 0.65% APY checking account (no reductions for high balances as far as I'm aware), 24 hour US-based customer service, billpay, slick mobile app, etc.
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You and I should get kickbacks for all this free advertising
 
While I am not advocating a cashless society, I carry no cash most of the time. At home and in my travels, it seems that few merchants offer cash discounts, and carrying cash (and especially coins) is a nuisance. I'm also a germophobe, and the seat of a McDonald's toilet is likely cleaner than cash (yes, I realize that this is a personal issue). So generally, I don't like cash, but usually don't turn it down--after a thorough sanitation, of course.


JKG
 
asechrest said:
Plus 1.11% APY savings account, 0.65% APY checking account (no reductions for high balances as far as I'm aware), 24 hour US-based customer service, billpay, slick mobile app, etc.
Click to expand...

Holy cow, if I could find a bank or CU around here with those rates, I might be tempted to switch.


JKG
 
JGoodish said:
Holy cow, if I could find a bank or CU around here with those rates, I might be tempted to switch.
JKG
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If you can deal with (likely) no brick-and-mortar location near you, check out Alliant Credit Union. They began as United Airlines employee credit union, and are the 5th largest credit union, over $8B in total assets. I'm truly pleased with them. They're stable, modern, friendly, good rates, good capabilities. I truly have little use for a brick and mortar these days. The inability to walk in and get an immediate cashiers check seems to be the biggest downside.

I don't mean to sound like an affiliate (I'm not), but the difference between traditional bank and these guys is night and day. There are some other national credit unions that I'm confident offer similar things.
 
denverpilot said:
Just think. Now they want to do this...

http://www.nbcnews.com/business/con...offers-restaurants-10-000-go-cashless-n782276

http://www.cnbc.com/2017/07/14/visa-business-incentive-us-uk-war-on-cash.html

I'm sure it's all for the customer's good... LOL.
Click to expand...

If I understand how it works, a credit card purchase hits no fewer than three servers not counting my own storage (which does not have my name nor CC number but is traceable to me). I'm sure it's advertisers, the IRS's, NSA's, and FBI's wet dream to have 100% complete database of all our transactions.
 
No way in hell will I ever use a debit card. I will not allow anyone including banks to automatically pay my bills or make a deduction from my account. Call me "old fashioned" if you wish. I prefer to protect what assets I have, and giving someone other than a highly trusted friend access to my checking account is not among my priorities. Bills get paid in the old fashioned way. I send them a check. When that ends I will revert to "cash only".
 
Norman said:
No way in hell will I ever use a debit card. I will not allow anyone including banks to automatically pay my bills or make a deduction from my account. Call me "old fashioned" if you wish. I prefer to protect what assets I have, and giving someone other than a highly trusted friend access to my checking account is not among my priorities. Bills get paid in the old fashioned way. I send them a check. When that ends I will revert to "cash only".
Click to expand...

I hate to say it, but using a check is way less secure than using a debit card. All someone needs are the numbers on the bottom of the check to withdraw money from your account. They don't need the check and they don't need your signature. In fact, most merchants and banks who process checks now do so electronically--shredding the check and debiting the funds electronically. By using checks, you're freely distributing your account information to anyone with access to the check.

With that being said, though I pay most of my bills electronically, I do not authorize automatic payment from my account. I will set up the electronic payment from my bank to the merchant once I receive the bill, and in the case where a merchant won't accept an electronic payment, the bank will send out a check. Saves on having to buy checks and postage, too.

In all honesty, perhaps the best way to protect your money against fraud is to pay for everything with someone else's money (i.e. a credit card). You can still be swindled out of cash, but banks seem a lot more interested in detecting and protecting against fraudulent transactions when you're spending their money first.


JKG
 
I've used my debit card exclusively for almost five years now. Never had a problem.
 
Almost all my purchases (90%+) are made with credit cards. I only use my debit card to get cash at the ATM and I only use the cash in situations where a credit card isn't accepted or is more inconvenient than it's really worth. I do pay bills online but I push it from my account using online banking. I do not allow anyone to pull from my account.
 
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