Skip to content
BOL Conferences
Thread Options
#1677245 - 03/14/12 01:09 PM Reg E Claim or Not???
Dutch Offline
Gold Star
Joined: Nov 2005
Posts: 262
Discount airline Direct Air just announced that it has suspended all flights scheduled for the next two months (apparently because they did not pay their fuel bill), and that ticket holders should contact their credit card company for refunds.

We have a number of customers calling the bank, attempting to get their refund. However, in all of these instances the customer used their VISA branded debit card (not a credit card)to make the ticket purchase.

1) Since these transactions were authorized (in some instances as far back as September or October 2011), it is my understanding that these customers do NOT have the right to file a Regulation E claim, correct? (I do not believe that Reg E covers authorized transactions where the customer does not receive the goods purchased).

2) If these purchases do not qualify for a Reg E claim, is the bank REQUIRED to help them get their money back, and if so, how do we go about it? (For example, we wouldn't want to have them complete Reg E Claim paperwork when it isn't really a Reg E claim, and we wouldn't want to be obligated to provide provisional credit).

3) If the answer to question #2 is "no, the bank is not required to assist these customers", is there something the bank could do to try and help these people out, if we so choose?

At this juncture, we believe that this circumstance does not qualify as a Reg E Claim, but are unsure if the bank has some other obligation to assist these customers under the VISA check card rules (or some other rules).

Can anyone help? Thank you.

Return to Top
Deposits and Payments
#1677253 - 03/14/12 01:16 PM Re: Reg E Claim or Not??? Dutch
kjbabington Offline
100 Club
Joined: Jan 2006
Posts: 203
FL
I have the same question under Mastercard branded debit card. Any guidance would be helpful!

Return to Top
#1677268 - 03/14/12 01:33 PM Re: Reg E Claim or Not??? Dutch
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
You are both correct that these claims will not be covered under Reg E. Under VISA and MasterCard rules you still have an obligation to assist your cardholders.

You should request that your cardholders write a dispute letter that includes their card number, date account was charged, and a detailed desciption their conversation with the airline. If the airline provided a written notice to the customers asking them to go the the bank/credit card issuer for a refund, include this documentation also.

VISA issuers should file (or direct your processor to file) chargeback code 30 Member Message 1: SERVICES NOT RENDERED.

MasterCard issuers should file chargeback code 4855 Goods or Services not Provided.

Both card brands require that you provisionally credit the cardholder's account once the chargeback has been filed. The only way the bank will lose this case is if the airline can prove that the cardholder has previously been refunded or actually used the tickets prior to operations being suspended. In these instances the bank would debit the provisional credit and not absorb a loss.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top
#1677300 - 03/14/12 02:03 PM Re: Reg E Claim or Not??? BrianC
Dutch Offline
Gold Star
Joined: Nov 2005
Posts: 262
Thank you Brian. Do you happen to know what the time frames are for providing the provisional credit, resolving the dispute and making the provisional credit final, and what the customer notification requirements are? I am not sure if they mirror Reg E or not.

Also, we generally track our claims on a Reg E Claim Log to make sure the various milestones are met by the required deadline. Do you suggest tracking these claims on a log also (I would propose adding them to a similar but separate log so there is no confusion about the nature of the claim and the requirements that apply)?

Any assistance you can offer would be greatly appreciated!

Return to Top
#1677364 - 03/14/12 03:00 PM Re: Reg E Claim or Not??? Dutch
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
I agree a seperate log would be appropriate. Unlike Reg E, VISA/MasterCard do not have time limits for completing your investigation. Provisional credit should be provided when your processor files the chargeback.

Once the chargeback is processed, the merchant has 45 days to provide a response. If they fail to respond during this timeframe, then you can consider the matter closed.

VISA/MasterCard do not have requirements regarding customer notification. To keep my procedures consistant, I mail them a notice when the account is credited and when I complete my investigation and also keep a copy of the notices in my file for audit purposes. How you choose to notify your customer and how you choose to document your actions is up to you.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

Return to Top

Moderator:  John Burnett