A customer calls in and wants to dispute a fradulent "hold". There is no transaction posted, simply a hold, but it affects the customer availability.

Does the Reg E error resolution process kick in? Do you provide provisional credit? Do you have the customer sign the unauthorized transaction form?

Not sure how to proceed when there's no transaction posted.

There is nothing you can do, unless you have some way of releasing the hold as a customer service. It is not covered under Regulation E, as there is no transaction to dispute.

Thanks!!

Although it's not a norm, a significant number of authorization holds drop off without ever being replaced by an actual transaction, and many more of them are replaced by transactions varying significantly from the dollar amount of the hold. Examples of the latter include the notorious $1 de minimis fuel pump hold, holds from restaurants and other businesses in which post-authorization tips are often added, and holds placed by hotels and other accommodations and auto rental firms. It's only after a transaction has actually posted to an account that your customer has a regulatory right to enter a claim under Reg E §1005.11.

That said, if a customer alleges that a hold has been placed inappropriately on the customer's account, and evidence supports such a claim, it seems to me a good business practice to remove or adjust the hold if the customer needs the use of the held funds. I cannot cite anything in Reg E or Reg CC to support that position; neither regulation really addresses these types of holds.

What about accepting a premature claim from your consumer customer, just in case the hold blossoms into an actual transaction? If you are equipped to be able to accept such a claim and adequately document that it becomes a viable claim only if and when the transaction posts, I don't see anything wrong with accommodating your customer this way. But I also think you can legitimately tell the customer that the claim can't be accepted unless a transaction forming the basis of the claim actually posts. If you accept a "pending" claim, and can document the date it becomes an effective claim (the posting date of the live transaction), I'd start the error resolution day counts from the effective date of the claim, rather than the date the customer presented it to you.

Before deciding that you'll go ahead and accept these advance claims, consider the fact that you won't know when they are filed when or if the transaction will post or what the dollar amount of the transaction will be. That could mean you'll need to communicate with your customer when a transaction does post to his account to clarify the details of the claim (dollar amount, for example). That extra hand-holding may be more than your operation can manage.