ABSTRACT
… This article examines five of the most common payment systems – checks, debit cards, ACH debits, wire transfers, and credit cards-and their general rules for allocating losses prior to and after execution of a payment transaction. The final section of this article considers recent developments in society and technology, notably the problems of Internet security and identity theft. This article asks whether the divergent approaches taken to the problem of unauthorized payment transactions should be unified. This article concludes by advocating, at least for small account holders, an approach based upon principles developed from the credit card system, even though these principles were not implicit in the minds of the drafters of the TILA. The first step in the analysis is to briefly consider what the loss allocation rules are for each of the five payment systems for pre- and post-transaction activities. This discussion is not meant to be exhaustive, but rather to highlight the differences in approach between the different payment systems.
Facciolo, Francis, Unauthorized Payment Transactions and Who Should Bear the Losses (April 1, 2008). St John’s Legal Studies Research Paper No 19-0012; Chicago-Kent Law Review, volume 83, issue 2, 2008.
First posted 2019-03-22 07:19:29
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