Module 1 Reg E Overview

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Module 1 Reg E Overview - Quiz


Questions and Answers
  • 1. 

    The purpose of Reg E is to protect the ___________.

    • A.

      Consumer

    • B.

      Bank

    Correct Answer
    A. Consumer
    Explanation
    Reg E, also known as the Electronic Fund Transfer Act, is a federal law designed to protect consumers in electronic transactions. It establishes the rights and liabilities of consumers and financial institutions when it comes to electronic fund transfers, such as ATM transactions, debit card purchases, and direct deposits. The purpose of Reg E is to ensure that consumers are provided with clear and accurate information about their electronic transactions, as well as to establish procedures for resolving errors and unauthorized transactions. By focusing on the consumer, Reg E aims to safeguard their interests and promote fair and transparent electronic transactions.

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  • 2. 

    Debit Card transactions are counted as Electronic Fund transfers?

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Debit card transactions are counted as electronic fund transfers because when a debit card is used, funds are electronically transferred from the cardholder's bank account to the merchant's account. This transfer of funds is done electronically through the banking system, making it a form of electronic fund transfer. Therefore, the statement "Debit Card transactions are counted as Electronic Fund transfers" is true.

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  • 3. 

    An unauthorized electronic frund transfer is a transaction that was not authorized by the customer or anyone authorized by the customer?

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    An unauthorized electronic fund transfer refers to a transaction that has taken place without the customer's consent or the consent of anyone authorized by the customer. Therefore, the statement "An unauthorized electronic fund transfer is a transaction that was not authorized by the customer or anyone authorized by the customer" is true.

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  • 4. 

    What is an acceptable way for the customer to notify the bank of an error? 

    • A.

      Mail

    • B.

      In Person

    • C.

      Phone

    • D.

      All of the Above

    Correct Answer
    D. All of the Above
    Explanation
    Customer can notify the bank of an error by Mail, In Person or Phone

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  • 5. 

    A cardholder notifies the bank in December of 2013 that a recurring charge has been coming out of their account since January  2013 for $19.95.  They are claiming the charges are unauthorized and closed their card at the time a case was entered in May.

    • A.

      Deny the claim as we did not receive proper notice.

    • B.

      Advise the customer that since they did not notify us within 60 days of the unauthorized transaction we are only responsible for the first 3 months of charges.

    • C.

      Give them credit for all of the charges and chargeback what we can.

    Correct Answer
    B. Advise the customer that since they did not notify us within 60 days of the unauthorized transaction we are only responsible for the first 3 months of charges.
    Explanation
    The correct answer is to advise the customer that since they did not notify the bank within 60 days of the unauthorized transaction, the bank is only responsible for the first 3 months of charges. This is because according to most bank policies and regulations, customers are required to report any unauthorized transactions within a certain timeframe, typically 60 days. Since the cardholder notified the bank in December 2013 about a recurring charge that started in January 2013, they did not meet the notification requirement, and therefore the bank is only responsible for the first 3 months of charges.

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  • 6. 

    A cardholder contacts the bank in December 2013 and closes their card due to unauthorized transactions since November 2013 to the same merchant for $29.95.

    • A.

      Issue provisional credit and submit chargebacks for all transactions.

    • B.

      Deny the claim as we did not receive notice in November.

    • C.

      Advise the customer that since they did not notify us within 60 days of the unauthorized transaction we are only responsible for the first 3 months of charges.

    Correct Answer
    A. Issue provisional credit and submit chargebacks for all transactions.
    Explanation
    The correct answer is to issue provisional credit and submit chargebacks for all transactions. This is because the cardholder contacted the bank in December 2013 to report unauthorized transactions that occurred since November 2013. By issuing provisional credit, the bank can provide temporary reimbursement to the cardholder while the investigation is ongoing. Additionally, submitting chargebacks allows the bank to dispute the transactions with the merchant and potentially recover the funds.

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  • 7. 

    A cardholder is claiming the last charge to a merchant was unauthorized. However the charge has been recurring for the last 4 months and the cardholder is only disputing the last one as fraud.

    • A.

      Issue provisional credit for all 4 transactions and chargeback for fraud.

    • B.

      Ask for cancellation information since the charge has been recurring and the others are not in dispute.

    • C.

      Issue credit for the only transaction in dispute.

    Correct Answer
    B. Ask for cancellation information since the charge has been recurring and the others are not in dispute.
    Explanation
    The correct answer is to ask for cancellation information since the charge has been recurring and the others are not in dispute. This is because the cardholder is only disputing the last charge as fraud, while the previous charges have not been disputed. Therefore, it is important to gather cancellation information to understand why the cardholder is claiming the last charge as unauthorized, while the previous charges were authorized. This information will help in determining the appropriate action to take regarding the disputed charge.

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  • 8. 

    A cardholder gives their card to a friend to go get gas.  The cardholder then gets upset at the friend because they won't pay them back; the card has not been reported lost or stolen.  Is this a valid fraud claim?

    • A.

      Yes

    • B.

      No

    Correct Answer
    B. No
    Explanation
    No, this is not a valid fraud claim. The cardholder willingly gave their card to a friend, indicating that they authorized the friend to use it for the purpose of getting gas. The fact that the friend is not paying them back does not constitute fraud, as there was no unauthorized use of the card.

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  • 9. 

    A cardholder shops at the same Kroger on Cemetery Rd. several times a month. The cardholder claims the last transaction at this Kroger was not authorized. The amount is within the customer's normal shopping pattern and there are two transactions that occurred after that are not in dispute.  Is this a valid dispute?

    • A.

      Yes

    • B.

      No

    Correct Answer
    B. No
    Explanation
    This is not a valid dispute because the cardholder claims that the last transaction at Kroger was not authorized, but there are two transactions that occurred after that which are not in dispute. This suggests that the cardholder continued to use the card at the same Kroger after the alleged unauthorized transaction, indicating that they may have authorized it themselves.

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  • 10. 

    A cardholder goes to a store and attempts to make a purchase with their debit card. The cardholder is told the purchase did not go thru so they write a check for the amount of the transaction. Both the Debit Card transaction and the check post to their account. What scenario is this an example of?

    • A.

      Fraud

    • B.

      Credit Posted as Debit

    • C.

      Paid by Other Means

    • D.

      Double Billing

    Correct Answer
    C. Paid by Other Means
    Explanation
    This scenario is an example of "Paid by Other Means." The cardholder attempted to make a purchase with their debit card, but it did not go through. As a result, they wrote a check for the amount of the transaction, which was then posted to their account. This indicates that the payment was made using an alternative method, in this case, a check, rather than the original intended method of using the debit card.

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  • 11. 

    A cardholder lives and works in Columbus, OH. They go out to eat at a local restaurant at 06:00 p.m. That same day and time a transaction occurs in Florida on the cardholder’s account with the same Debit Card number.  This is potentially what type of fraud?

    • A.

      Stolen

    • B.

      Lost

    • C.

      Customer Doesn't Recognize

    • D.

      Counterfeit

    Correct Answer
    D. Counterfeit
    Explanation
    The correct answer is counterfeit. Counterfeit fraud occurs when a fraudulent card is created using stolen card information. In this case, the cardholder's debit card number was used to make a transaction in Florida while they were in Columbus, suggesting that someone created a counterfeit card using their information.

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  • 12. 

    A cardholder goes to Target and makes a purchase for $47.82.  When they review their transactions they see that it has posted to the account two times for the same amount and on the same day. What is this an example of?

    • A.

      Paid by Other Means

    • B.

      Duplicate Processing

    • C.

      Wrong Amount

    • D.

      Customer Doesn't Recognize

    Correct Answer
    B. Duplicate Processing
    Explanation
    This is an example of Duplicate Processing. It occurs when the same transaction is posted to the account multiple times, resulting in duplicate charges. In this case, the cardholder noticed that the purchase made at Target was posted twice for the same amount on the same day. This could be due to an error in the payment processing system or a technical glitch. The cardholder should contact their bank or credit card company to report the duplicate charges and request a refund.

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  • 13. 

    Cardholder orders a cooking kit, it was to be delivered to them within 7 days. A total of fifteen days have elapsed and they still have not received the kit. What is this an example of?

    • A.

      Non Receipt of Goods or Services

    • B.

      Credit Posted as Debit

    • C.

      Customer Doesn't Recognize

    • D.

      Stolen Card

    Correct Answer
    A. Non Receipt of Goods or Services
    Explanation
    This is an example of non-receipt of goods or services. The cardholder ordered a cooking kit and it was supposed to be delivered within 7 days. However, 15 days have passed and they still haven't received the kit. This indicates that the goods or services they paid for have not been delivered to them.

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  • 14. 

    Which of the following are different types of access devices.

    • A.

      Debit Card

    • B.

      PIN

    • C.

      Checks

    • D.

      All of the Above

    Correct Answer
    D. All of the Above
    Explanation
    The correct answer is "All of the Above" because all three options mentioned - Debit Card, PIN, and Checks - are different types of access devices. A debit card is a physical card that allows access to funds in a bank account, a PIN (Personal Identification Number) is a numeric code used to authenticate and access various accounts, and checks are written documents that provide access to funds in a bank account when presented for payment. Therefore, all three options mentioned are valid examples of access devices.

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  • 15. 

    Can a customer reassert a claim that an error has occurred?

    • A.

      Yes

    • B.

      No

    Correct Answer
    A. Yes
    Explanation
    A customer can reassert a claim that an error has occurred because they may have new evidence or information to support their claim. Additionally, they may have initially been denied or overlooked, and reasserting their claim gives them another opportunity for resolution.

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  • 16. 

    A customer has 90 days to report an error has occurred to the bank.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Customer has 60 days to report an error.

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  • 17. 

    How long does the bank have to determine if an error has occurred without issuing provisional credit?

    • A.

      5

    • B.

      10

    • C.

      20

    • D.

      90

    Correct Answer
    B. 10
    Explanation
    The bank has 10 days to determine if an error has occurred without issuing provisional credit. This means that within this time frame, the bank must investigate and verify the error before taking any action to provide temporary credit to the customer. This allows the bank sufficient time to conduct a thorough investigation and ensure that the error is genuine before making any financial adjustments.

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  • 18. 

    If the bank is unable to resolve in 10 business days, how can the time frame be extended?

    • A.

      Notify the customer in writing

    • B.

      Issue provisional credit to the customer

    • C.

      Deny the customer's case

    • D.

      Nothing

    Correct Answer
    B. Issue provisional credit to the customer
    Explanation
    If the bank is unable to resolve the issue within 10 business days, they can extend the time frame by issuing provisional credit to the customer. This means that the bank will temporarily credit the customer's account while they continue to investigate and resolve the issue. This ensures that the customer is not left without funds during the investigation process and provides them with some financial relief.

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  • 19. 

    If provisional credit has been issued, what are the applicable time frames to resolve a case? Please check all that apply.

    • A.

      10

    • B.

      20

    • C.

      45

    • D.

      90

    Correct Answer(s)
    C. 45
    D. 90
    Explanation
    ATM - 45 Days Debit Card/POS - 90 Days

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  • 20. 

    If the bank determines no error has occurred what should they do next?

    • A.

      Notify the customer in writing

    • B.

      Notify the customer by phone

    • C.

      Issue provisional credit to the customer

    • D.

      Nothing

    Correct Answer
    A. Notify the customer in writing
    Explanation
    If the bank determines no error has occurred, they should notify the customer in writing. This is important to keep the customer informed about the investigation and the bank's findings. Written communication provides a clear record of the bank's decision and ensures transparency in the process. It also allows the customer to have a physical document for their records and reference if needed in the future.

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  • 21. 

    How many days does the bank have to issue provisional credit after written notice has been received?

    • A.

      5

    • B.

      10

    • C.

      15

    • D.

      20

    Correct Answer
    B. 10
    Explanation
    After receiving written notice, the bank has 10 days to issue provisional credit. This means that within 10 days of receiving the notice, the bank must provide a temporary credit to the account holder while they investigate the issue further. This allows the account holder to have access to the funds during the investigation process.

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  • 22. 

    Every fraud claim is considered a valid fraud claim.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false because not every fraud claim is considered valid. Fraud claims need to be investigated and proven before they can be considered valid. There are cases where fraud claims are found to be false or unsubstantiated after investigation. Therefore, it is incorrect to assume that every fraud claim is automatically considered valid.

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  • 23. 

    Check all valid fraud denial reasons.

    • A.

      Normal shopping pattern.

    • B.

      Card on not on CAMS

    • C.

      Customer frequents the merchant location

    • D.

      Card not reported Lost/Stolen

    • E.

      Customer's shopping footprint/vicinity

    Correct Answer(s)
    A. Normal shopping pattern.
    C. Customer frequents the merchant location
    D. Card not reported Lost/Stolen
    E. Customer's shopping footprint/vicinity
    Explanation
    The correct answer includes valid fraud denial reasons such as normal shopping pattern, customer frequents the merchant location, card not reported lost/stolen, and customer's shopping footprint/vicinity. These reasons suggest that the customer's behavior and shopping habits are consistent and do not raise any suspicion of fraudulent activity. Additionally, the fact that the card is not reported lost or stolen further supports the legitimacy of the transactions.

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