We have a customer who is disputing several signature based transactions made at a seedy night club. Customer's written statement claims he authorized a $100 and a $400 debit. The next day customer looks at his account online and sees 4 debits for $115 each and one for $500. I assume this would be handled under the VISA rules since its sig based. However, is this even an unauthorized transaction? I would rather send him back to the merchant.

I am reluctant to give provisional credit as customer claims he had been drinking. Afraid he may close his account and leave us taking a loss if I attempt to take back provisional credit after finding no error.

I don't believe Reg E or VISA gives protects the bank based on the level of intoxication of the customer. Since VISA requires you give provisional credit in 5 business days, which is more restictive, I believe you must credit the customer after the five days. If the merchant refutes your chargeback with a signed receipt bearing your customer's signature, then revoke the provisional credit. If this creates an overdraft and you can't collect, turn your customer over to Chexsystems.
Unfortunately, this is the risk of offering this product.

Thanks, but I am really looking at whether this is really an unauthorized transaction.

My question is this: Is the VISA definition of "Unauthorized" the same as Reg E definition. Under Reg E, I could tell the customer to take his dispute up with the merchant as this tranasction does not meet the definition of "unauthorized." Unaithorized means a transaction made by someone other than the owner of card/account.

He is claiming that he did NOT authorized the 4 $115 and $500 transactions. There is an option on most WSUPP forms that documents...I authorized XXX, but I was charged XXX. I believe such a transaction is "unauthorized".

Perhaps there was a service charge added to the transactions. See if you can call the night club. I have found that some of these type establishments are quick to respond to requests for proof of authorization. Often the transactions are formally documented as being witnessed by others due to frequency of attempts to claim they are unauthorized.

Thanks.