What are my obligations under Reg E if a customer states orally that a debit card transaction (POS or online) is not his and he did not authorize it and he refuses to make the claim in writing.
Currently, I would send the customer a notification that we can not further investigate the claim unless it is in writing and that I would "close" the case unless the consumer provides more information in writing. When it pertains to a Visa Debit Card transaction I do ask that the consumer try to resolve the dispute with the merchant especially if it is an online transaction and the card isn't lost or stolen.
I'm being told I can't close the case.

From section 1005.11 (emphasis mine)

(b) Notice of error from consumer. (1) Timing; contents. A financial institution shall comply with the requirements of this section with respect to any oral or written notice of error from the consumer that:

(i) Is received by the institution no later than 60 days after the institution sends the periodic statement or provides the passbook documentation, required by § 1005.9, on which the alleged error is first reflected;

(ii) Enables the institution to identify the consumer's name and account number; and

(iii) Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section.

(2) Written confirmation. A financial institution may require the consumer to give written confirmation of an error within 10 business days of an oral notice. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification.

(3) Request for documentation or clarifications. When a notice of error is based on documentation or clarification that the consumer requested under paragraph (a)(1)(vii) of this section, the consumer's notice of error is timely if received by the financial institution no later than 60 days after the institution sends the information requested.

So if the consumer does not provide written confirmation of the error, I can discontinue the investigation or I must continue the investigation?

You must perform the investigation. Lack of written notice allows you to forego provisional credit (1005.11.c.2.i), but you've still got to do the rest.

Bobby is correct, K4. There is very little the consumer needs to do to place a claim and your clock starts ticking when that claim is made.

You should review my upcoming webinar. It might be of interest to you as I will discuss this exact thing, plus tools/checklists available to help you. There was one bank doing its claims wrong, that is it had a bad policy, and it was fined under UDAP rather than Reg E because it was a greater penalty that way. Your scenario could be similar.

http://calendar.bollearningconnect.com/main.php?view=event&eventid=1330958236548

You are being told correctly.

I understand that VISA may require documentation from the cardholder in order for you to file a chargeback. Regardless of VISA requirements, you are still obligated to follow Section 1005.11 of Reg E.

A financial institution shall comply with the requirements of this section with respect to any oral or written notice of error from the consumer that:

(i) Is received by the institution no later than 60 days after the institution sends the periodic statement or provides the passbook documentation, required by § 1005.9, on which the alleged error is first reflected;

(ii) Enables the institution to identify the consumer's name and account number; and

(iii) Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section.

The bold sections are all the information you can "require" from the customer. The regulation requires that you investigate. You cannot require written confrimation. You cannot require that the cardholder first contact the merchant. You cannot require a police report.

If the cardholder refuses to provide written confirmation, Reg E does allow you to not issue provisional credit.

Written confirmation. A financial institution may require the consumer to give written confirmation of an error within 10 business days of an oral notice. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification.

In the event you do not receive written confirmation, the 90-day investigation timeframe still applies. You may not deny the claim solely on the basis of a cardholder not providing written confirmation. Your investigation options include contacting merchant yourself, or filing a Retrieval Request with your card processor. Retrieval requests do not require a cardholder's signature and will compel the merchant to produce documentation regarding the authorization (sales receipt, shipping information for an online order, etc.) You can then use this documentation to make a determination regarding the cardholder's claim.

Got it.
So I have a case where the consumer used his card to authorize games on his brother's xbox. The xbox continues to charge the consumers card everytime his brother plays a game.
Customer states he did not authorize those charges. And granted he may not have authorized the recurring charges, or at least he didn't realize he did when he authorized the first charge.
I did not provide provisional credit and I have not completed the investigation entirely other than knowing the transactions are recurring. This was an online transaction. So am I required to give him credit if all I can prove is that it is an ongoing recurring transaction stemming from his authorization of the first transaction?

What he initially authorized, or thought he authorized at the beginning does not matter in this situation.

You will be able to deny his claim on the basis that it does not meet Reg E's definition of an "unauthorized funds transfer."

The staff interpretations to Reg E 1005.2(m) state

Authority. If a consumer furnishes an access device and grants authority to make transfers to a person (such as a family member or co-worker) who exceeds the authority given, the consumer is fully liable for the transfers unless the consumer has notified the financial institution that transfers by that person are no longer authorized.

Brother was given permission to use card. X-Box saves the card data to charge for furture game purchases. Brother exceeds permission for using card only once by playing games. This matter is between the brothers. There really isn't much more investigation that is needed as you can use your cardholder's own statement as a basis for denying the claim.

The only caveat to this is if the claim is that the X-Box account was hacked and someone other than the brother made the charges.

That is exactly what I thought. Thank you!

K & Brian, not saying this is the case here, but just for fun...

Assume that the customer shares an Xbox with his brother and customer used his card to set up an account for his use only (you know how brothers can be). In essence he has furnished the access device by attaching it to the Xbox account. But he tells his brother not to use this account (or never tells brother he can use the account), and brother does anyway. This would be an unauthorized eft since the brother was never granted authority, right?

Yes, it would probably be viewed as unauthorized, depending on individual claim circumstances.

More importantly, make sure the customer knows he needs to figure out how to stop the ongoing transactions.

I agree with John, if the X-Box info was stolen (even if it was by a family member) the transactions are unauthorized. It's a fine line in these situations as to what is authorized and what isn't. Training your front line staff on what questions to ask the cardholder when they make their initial claim can often be the difference between approving a claim and taking a loss or denying a claim.

We have a little different take on the above situation. We are now researching a claim in which the cardholder says the Xbox account was closed by mutual agreement several months ago, and the boyfriend (brother in the above scenario) was allowed to re-open the account by Xbox without the cardholder's knowledge or permission. Our research shows 3-4 months passed between the last authorized transaction and the disputed one, which might support the cardholder's assertion.

My take is this scenario crosses the fine line Brian refrences in his above post. We disputed the transaction based upon the cardholder's statement the account was re-opened without their consent, and received a representment today. The amount is too small for arbitration. I think we have a valid Reg E claim, and will have to reimburse the cardholder.

Thoughts?

I'd be in your corner on that.

Thanks John!

Ok- There's a new twist to my story. I just reviewed the representment documentation from Xbox. Looks like the original account boyfriend established with the cardholder's permission was never closed. They simply just canceled the plan he was on (I don't think she had a clue). He then opened a new plan with Xbox 3 months later on the existing account.

I think this scenario crosses back over Brian's fine line to the transaction being authorized. The cardholder should have ensured the account was completely closed, and didn't. The disputed amount is small, so we decided not to revoke the provisional credit.

This just underscores the need to update Reg E. There are so many new and different electronic payment scenarios, it's like walking through a minefield when making a determination.