When Robin and Arie Genchel heard from Chase that someone in France had charged over $11,000 to their debit card for a jewelry purchase, they had every reason to believe their card would stop payment of the charge.
But the following day, Chase debited their bank account for the full amount of the charge – and more. And it won’t reverse the charge even though it was clearly fraudulent.
How could Chase have allowed payment on an obviously phony charge? Why won’t it return the Genchels’ money? And what can the Genchels do to get their money back?
On Sept. 7, at 6:47 a.m., the Genchels received email notification from Chase advising them that an $11,085 debit card transaction exceeded their $125 daily limit. They immediately notified Chase on the telephone, by email and through personal visits to several local branches of the bank that the charge was unauthorized.
Chase determined that the charge had been made in France for a jewelry purchase from a Daniel Gérard Joaillerie. The Genchels live in Woodland Hills, Calif., where Arie Genchel had recently undergone surgery for a broken hip. They had not been in France at all; nor had they purchased any jewelry. Despite this determination, Chase debited $11,422 (the original charge plus an additional $337) from their account.
The next day, Robin Genchel called Chase and was told that a claim had been filed and that “the claims department was working on it.”
But three days later, the money had not been restored to her account. She called Chase’s customer claims department again and was told that on Sept. 7 Chase had made four phone calls to the Genchels, who had approved the transaction.
The Genchels had not received any of these calls and say they had not approved the transaction. The telephone numbers Chase allegedly called were to a former fax line number that no longer belonged to the Genchels, and to Arie Genchel’s business – which was closed at 6:47 a.m. Chase refused to provide the Genchels copies of recordings of the calls.
The Genchels continued to follow up with Chase’s customer claims department, only to be given a runaround. Each time they called, they were transferred to another agent. Some of the agents they spoke to were in foreign countries. Many responded to the Genchels, if at all, in a curt, condescending manner.
One agent actually told the Genchels that “since they had so much money in the bank, they would not miss an extra $11,000.” (Really?) But all the agents replied that they were investigating, they needed more time, or that there was nothing they could do for the Genchels because “they had authorized the charge.”
And Chase ultimately told the Genchels that it “had investigated the claim and determined it to be legitimate;” therefore, they were denying the Genchel’s claim.
Debit card transactions are covered by Regulation E of the Electronic Fund Transfer Act (EFTA), which provides that once a financial institution is notified of an error, including an unauthorized debit card transfer, the institution must:
- Promptly investigate the oral or written allegation of error,
- Complete its investigation within 10 business days, (Section 205.11(c)(1))
- Report the results of its investigation within three business days after completing its investigation, and
- Correct the error within one business day after determining that an error has occurred.
So if a customer immediately notifies the bank that a debit card charge is unauthorized, as the Genchels did, the customer should not be liable for the charge at all.
Chase’s website indicates that it offers “real-time fraud monitoring” as a service to its customers:
Real-time fraud monitoring:
If a debit card transaction is out of character from your normal spending habits, we may contact you to make sure it’s actually yours.
Sign up and we’ll call, text or email you if a debit card purchase or ATM withdrawal exceeds a limit you’ve specified.
You don’t pay for any unauthorized debit card transactions when you notify us promptly.
Unauthorized purchases and withdrawals are back in your account by the end of the next business day. You don’t have to wait while we investigate.
Yet despite the law and these promises, Chase didn’t provide the zero-liability protection or guaranteed reimbursement to the Genchels. Whatever “investigation” it did was as fraudulent as the charge that Chase never should have processed. And its customer claims department apparently needs an overhaul.
Consumers can protect themselves from unauthorized debit card charges by closely monitoring their accounts and immediately reporting unauthorized charges to their financial institutions, as the Genchels did. It is also often recommended that debit cards not be used at all; credit cards should be used instead.
The Genchels might have utilized our executive contacts for Chase. They reported the fraud to the Los Angeles Police Department, the FBI, and the Consumer Financial Protection Bureau, and shared their story with ABC and NBC local news networks.
They also contacted our advocates, but since they’re also suing Chase, their case is outside our wheelhouse. We hope that the courts give the Genchels the justice they are due by requiring Chase to return their stolen money. In the meantime, we’re posting their story as a warning to others.