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#1970118 - 10/17/14 12:59 PM Letter on Denied Dispute-Cust made whole by credit
dac1 Offline
Junior Member
Joined: Oct 2009
Posts: 38
We use standard dispute letter format that was obtained from a BOL webinar. I use the letter referencing honoring checks, drafts etc. for five days when a claim is denied and provisional credit removed - except in the case where the customer was "made whole" by a merchant refund or system correction. Specific example the customer was charged twice at ATM. Provisional credit was given but them a credit was received by bank for the charge made in error. Provisional credit was removed same day as credit applied, so the dispute letter did not include the language of honoring checks etc. for five days because the customer account was never without the funds. We have received an exam violation on this, so I want to clarify my understanding of when this language is required for my response.

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eBanking / Technology
#1970134 - 10/17/14 01:45 PM Re: Letter on Denied Dispute-Cust made whole by credit dac1
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
It is pretty straight forward. Any time you debit the account removing provisional credit from account. It doesn't matter why.


1005.11(d)(2) Debiting provisional credit. Upon debiting a provisionally credited amount, the financial institution shall:

(i) Notify the consumer of the date and amount of the debiting;

(ii) Notify the consumer that the institution will honor checks, drafts, or similar instruments payable to third parties.........
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#1970139 - 10/17/14 02:04 PM Re: Letter on Denied Dispute-Cust made whole by credit dac1
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,686
Illinois
Revoking provisional credit is done when we determine that no error has occurred. Rather than sending the "denial" letter, revoking provisional credit, and committing yourself to honoring overdrafts for 5 business days, send a letter that states that you determined an error did occur and are finalizing the provisional credit. Also state that during your investigation you determined that the cardholder received a duplicate credit and are debiting the account for the duplicate credit.

This separates the debiting of the account from your Reg E investigation.
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#1970311 - 10/17/14 06:44 PM Re: Letter on Denied Dispute-Cust made whole by credit dac1
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
Brian's suggestion also lays the facts out clearly so that an examiner can see that the customer wasn't caught flatfooted by the debit to collect the duplicate payment.
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