Visa has a card holder protection policy that states that banks must "extend provisional credit for losses from unauthorized card use within five business days of notification of the loss". Reg E states that a bank "shall determine whether an error occurred within 10 business days of receive a notice of error". Based on the Visa provisional credit rules are we required to give provisional credit when we receive notification from the customer OR when complete the investigation?

If Visa rules apply, not later than 5 days after you get the notification of the alleged loss. If Visa rules don't apply, Reg. E. rules are still there, and you provisional credit by the 10th business day, assuming you've received the error notice in writing.

John,
How do I know if Visa Rules apply???

Visa rules apply to signature debit transactions, since they go through the Visa switch. PIN POS transactions generally go through a regional or superregional ATM switch. In your case, probably NYCE or STAR. Even though you have a Visa logo on the card, it won't be subject to Visa error resolution rules unless Visa "touched" the transaction.

John, thanks for responding. I just need a clarification: based on what you said above, ANY signed debit transaction is subject to the VISA error resolution rules? What about a transaction where the consumer enters his/her pin? I'm wondering if it's best to adhere to these rules regardless of the type of transaction, b/c it seems hard to police this.

In most cases, if the customer does a POS transaction with his/her PIN, it won't be routed through Visa. It will go through a regional/superregional ATM network (NYCE, Star, etc.) instead. Since Visa doesn't touch the transaction, its rules won't apply.

I have not found out yet whether a PINned POS transaction that happens to route through Visa's own PIN debit system (Interlink) is subject to Visa error resolution rules.

What a timely subject! We are currently in the process of reviewing our EFT disclosure and we have discovered that we have extended the 5-day provisional credit to "Visa point-of-sale transaction"s. We left out the word "unauthorized".

I know that we must honor our disclosure until we can initiate a notice of change to our customers, BUT, in looking over other national vendor EFT disclosures, I don't see the word "unauthorized" in those disclosures either.

How is everyone else disclosing the 5-day provisional rule in the Error Resolution notice?