Error Resolution Timing

by Mary Beth Guard, BOL Guru

When a consumer makes a claim of error relating to an electronic funds transfer, the clock starts ticking on the time period within which Regulation E requires you to act.

In terms of the requirements for the error notice from the customer:

it may be given orally or in writing;
it should be received by the institution no later than 60 days after you send the periodic statement on which the alleged error is first shown;
it should include enough information to allow you to identify the consumer's name and account number. The customer doesn't have to actually provide the account number, so long as he gives enough information to allow you to determine the account in question;
it should indicate why the consumer believes and error occurred and should include, to the extent possible, the type, date and amount of the error.

You may require the customer to give written confirmation of an error within 10 business days of an oral notice, but doing so won't extend your time period. You may not delay initiating or completing an investigation pending receipt of the statement. If you have received the information set forth above orally, you must promptly begin your investigation.

There are strict time limits for the investigation, as described below. If, at the conclusion of the investigation, you determine either that no error occurred or a different error occurred, you must:

make a report of the results of your investigation;
include in the report a written explanation of your findings;
note the consumer's right to request the documents you relied upon in making your determination;
promptly provide copies of the documents, if requested.

If you determine an error did occur and you make a correction, you may include the notice of correction on a periodic statement, so long as it is mailed or delivered within the requisite investigatory time limits and it clearly identifies the correction.

Regular account EFT error
Initial time period for investigation: 10 business days

Report the results: within 3 business days after completing investigating.

Correct the error: within 1 business day after determining an error occurred.

Extended time period: up to 45 days if the investigation cannot be completed within 10 business days.

Requirements for use of extended period. The institution must:

provisionally credit the customer's account, including interest, where applicable UNLESS the customer does not provide the requested written confirmation within 10 business days of an oral notice of error;
inform the consumer, within 2 business days after the provisional crediting, of the amount and date of the provisional crediting;
give the consumer full use of the funds provisionally credited during the investigation;
correct the error, if there was one, within 1 business day after determining an error occurred;
report the results to the consumer within 3 business days after completing the investigation.

New account EFT error (one that occurred within 30 days after the first deposit was made to the account)
Initial time period for investigation: 20 business days
Report the results: within 3 business days after completing investigating.
Correct the error: within 1 business day after determining an error occurred.
Extended time period: up to 90 days if the investigation cannot be completed within 10 business days.
Requirements for use of extended period. The institution must:

provisionally credit the customer's account, including interest, where applicable UNLESS the customer does not provide the requested written confirmation within 10 business days of an oral notice of error;
inform the consumer, within 2 business days after the provisional crediting, of the amount and date of the provisional crediting;
give the consumer full use of the funds provisionally credited during the investigation;
correct the error, if there was one, within 1 business day after determining an error occurred;
report the results to the consumer within 3 business days after completing the investigation.

POS Debit card transaction or foreign-initiated transaction:
Initial time period for investigation: 10 business days
Report the results: within 3 business days after completing investigating.
Correct the error: within 1 business day after determining an error occurred.
Extended time period: up to 90 days if the investigation cannot be completed within 10 business days.
Requirements for use of extended period. The institution must:

provisionally credit the customer's account, including interest, where applicable UNLESS the customer does not provide the requested written confirmation within 10 business days of an oral notice of error;
inform the consumer, within 2 business days after the provisional crediting, of the amount and date of the provisional crediting;
give the consumer full use of the funds provisionally credited during the investigation;
correct the error, if there was one, within 1 business day after determining an error occurred;
report the results to the consumer within 3 business days after completing the investigation.

The original version appeared in the November 2002 edition of the Oklahoma Bankers Association Compliance Informer.

First published on BankersOnline.com 5/12/03