I have a question for the experts. Reg E makes it clear that a error resolution must be concluded within 45 day. According to the Visa Operating Regulations, the time frames for chargebacks and presentments can range from 20 to 180 days. Often we are waiting 45 days for to receive a copy request and then need to proceed with the chargeback. How do we satisfy Regulatory requirements to finalize a dispute and yet keep the case open to be able to fully investigate the claim through Visa? Any thoughts?

I have found a good way to keep it straight is that Reg E applies to PIN-based transactions. The Visa Dispute Resolution Rules are used for signature-based transactions. Unlike Reg E, these rules provide for many more disputes reasons such as quality of merchandise, merchandise not received and the like.

Reg. E is the rule. VISA chargeback rules are optional. They are optional because no one made you offer their product. And when you did this you agreed to abide by those rules which are designed to meet the needs of the consumer, the merchants and the banks.

Life just ain't fair.

Signature-based POS transactions using a Visa debit card are subject to a 90-day investigation period under Regulation E §205.11(c)(3)(ii), unless your state has a more restrictive rule (Massachusetts does). To avail itself of the 90-day limit, a bank must have disclosed this to its customers in its initial disclosures and annual re-disclosure (if the annual schedule is used).

Regulation E applies to ALL consumer debit card transactions, whether PIN-based or signature-based.

Thanks guys: I’m going to further my question with some specifics that will hopefully make my question more clear. Often a transaction receipt (copy request) is needed to determine if a chargeback right is available. Sometimes the cardholder can provide the transaction receipt but more often we must request a copy from the merchant. This is all a part of our investigation. When a transaction receipt is requested the merchant has 30 days to supply the copy. At the end of 30 days we can issue a chargeback with or without requested transaction receipt. At that point we are at the very least 30+ days into the investigation. When the 1st chargeback is issued the merchant has up to 45 days to represent and then 21 days to supply documentation to validate the representment. In my hypothetical situation we are now at 96+ days. We cannot finalize the dispute because the merchant can still represent for a valid reason. Furthermore we haven’t even discussed 2nd chargebacks and their time limits etc. How does everyone else do this? Do you finalize the dispute after 45 or 90 days to be in compliance with REG E, and then revoke provisional credit if the investigation warrants down the road?

Thanks for all your help and advise!

1. The chargeback rules are heavily stacked in favor of the merchant.
2. You must finalize any provisional credit within your 45/90 day limit under §205.11, and once final, it cannot be taken back.
3. You don't have to "work" merchant disputes that don't qualify as Reg. E errors under the §205.11 rules. You can work them, instead, under Visa/MasterCard rules, which, as we've seen, often take these things out longer than 90 days.

#1 above is particularly true when it comes to signatures. Visa won't even consider a signature case unless you can provide both the sales slip and the card with signed signature panel.

Unless I misread the discussions on BOL, my guess is that most banks are throwing in the towel at day 90, finalizing any provisional credit, and dropping the case.

What are the more restrictive MA rules? Can you point me to a citation? (The search function on the MA site is pitiful). Thanks.

Croak44: I agree that there are certainly situations in which Regulation E will not apply, and the bank will want to intercede on behalf the customer, using the Visa/MasterCard rules. Examples include shoddy merchandise, incomplete shipments, wrong color, etc., none of which constitutes an "error" under Reg. E. In these cases, Reg. E time frames don't apply. By the way, there are 7 things that qualify as an "error" under Reg. E, and "unauthorized transfer" is only one of those. Also included are math errors, wrong amounts, missing transfers, missing information in description, wrong amount from an ATM, and a customer's request for more info.

etm614: Massachusetts General Laws, Chapter 167B was written back in 1980 before Regulation E was finalized. It provided only the 10/45 day error resolution period (see section 17). It has not changed to keep up with the rest of the world. Because it is more protective of the consumer, banks in Massachusetts can't use the foreign ATM, POS, or new account extensions to the 10/45 day periods. (By the way, in Massachusetts, it's 10 calendar days, instead of Reg. E's 10 business days.)

John - I hope I am not showing gross ignorance here, but why are only "signature based" POS debit card transactions included in the 90 day investigation period rather than all POS debit card transactions (which appears to be what the reg says)?