Consumer Bureau Issues Guidelines on Fraud and Dispute Rights
The Consumer Financial Protection Bureau (CFPB) has issued guidance for consumers facing issues around electronic fraud, the right to dispute charges, and the responsibilities of banks.
Specifically, the CFPB guidelines clarify:
— Consumers can dispute charges as unauthorized even if they were fraudulently induced to share their account access information or if they were negligent
— Consumers’ dispute rights cannot be waived, including by terms in the bank agreement that governs sharing account information with third parties (i.e., data aggregators used by various apps)
— Consumers cannot be required to file a police report, or to first contact the store, lender or other merchant that made a charge, prior to disputing a charge
The CFPB noted scenarios in which consumers have been induced to share account information:
For example, the Bureau is aware of the following situations where a third party has fraudulently obtained a consumer’s account access information: (1) a third party calling the consumer and pretending to be a representative from the consumer’s financial institution and then tricking the consumer into providing their account login information, texted account confirmation code, debit card number, or other information that could be used to initiate an EFT out of the consumer’s account, and (2) a third party using phishing or other methods to gain access to a consumer’s computer and observe the consumer entering account login information. EFTs stemming from these situations meet the Regulation E definition of unauthorized EFTs.
Knowing your rights as a consumer is a key first step in protecting yourself — the new guidance from CFPB adds crucial clarity and notes that in general, current laws and regulations err on the side of the consumer.
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