A couple of issues have come up at my institution regarding Reg E written confirmations and provisional credits. I'd like to hear what the BOL folks have to say...

1. Reg E requires us to provisionally credit a customer 10 business days after they dispute a transaction if we have not completed the investigation (assuming written confirmation was received if requested). If the transactions are for a large dollar amount and we have a suspicion that the customer is actually responsible, is there any way we can get out of provisionally crediting the customer? For instance, if there are $10,000 worth of ATM withdrawals done using the card and PIN...

2. Reg E 205.11(b)i details the information a customer must provide in order to dispute a transaction. If we request information from the customer above and beyond that info and the customer does not respond, do we need to continue the investigation?

3. If the customer is asked to follow up a claim of unauthorized transaction with a written confirmation and it is not received, we are not required to provisionally credit the customer after 10 days. What if the customer provides the information required by Reg E over the phone but never follows it up in writing as requested? Our clearinghouse for EFT transactions will not send a chargeback if we don't have an affidavit signed by the customer, so we would not be able to complete our investigation. The Reg seems to put the burden of proving the transaction was authorized on the originator, but the clearinghouse is shifting that burden to the consumer by requiring an affidavit before it will send a chargeback.

Thanks to all for your feedback!

???

/bump

Wow, no responses...I guess this is a tough question...

If we don't get anything in writing, esp if it involves a debit/ATM card, we don't issue provisional credit. We've been burned a few times where we did and we rec'd nothing from the customer. Policy was then changed, and we haven't had any problems since.

If we don't receive the written/signed error resolution form back within the 10 days, we drop the complaint entirely. We do not provisionally credit until we receive those signed forms back at our bank.

1. If the customer provides the written confirmation within 10 days, I don't know of anything that would allow you to withold the provisional credit.

2. Yes. You may not delay your investigation based on receiving written confirmation.

3. See #2. Not receiving the written confirmation only provides an exemption for not providing provisional credit, it does not exempt your investigation requirements.

My answers are based on a quick read of the Commentary to 205.11.

1. No. There are no exceptions if you do not complete the investigation. This is why it is "provisional". If your customer is already a thief, Reg. E will not help you.

2. The notice may be extremely brief, from the OSC "The notice of error is effective even if it does not contain the consumer's account number, so long as the financial institution is able to identify the account in question." As Dan noted, you may hold back the provisional, but you must proceed with your investigation. Train staff to use a form and get the info needed up front. Having to go back to customers again and again for info, forms, police reports, etc. is not what Reg. E is about. It protects the customer, not you. (I didn't write it, don't blame me.)

If you cannot get any assistance from the customer, you complete your investigation based on what you do have. That may be very limited and may lead to a denial, but do your investigation. Done right, and closed, you don't have to reopen it for reassertion. Done wrong, you may hang yourself.

3. Review this thread.

FYI, John B and I are planning on a webinar dedicated to error investigation under "E" and V/MC rules. ACH type issues should be included as well.

Any idea when??

Sept. 8 looks like a date now.