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#1519737 - 03/09/11 10:02 PM Reg E claim or Merchant Dispute?
CARM9 Offline
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Joined: Feb 2011
Posts: 112
I am having a difficult time getting one of our departments to acknowledge that a consumer can make the claim that a debit card purchase through a merchant can be a reg e dispute under certain circumstances and is not always simply a merchant dispute that we can decline to pay or investigate.

Can someone please provide a simple english explanation of when it is a reg e claim and when it is a merchant dispute not covered under reg e?

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Operations Compliance
#1519777 - 03/09/11 10:49 PM Re: Reg E claim or Merchant Dispute? CARM9
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
Look to Sec 205.11 of Reg E for a definition of what an error is.

i. An unauthorized electronic fund transfer.

This would be a debit that occurred from a lost/stolen/skimmed/counterfeit card or stolen card number in the case of an online purchase.

ii. An incorrect electronic fund transfer to or from the consumer's account

Although not a fraud dispute, if the customer was charged the wrong amount by a merchant or charged twice for the same transaction, this is a Reg E error.

iii. The omission of an electronic fund transfer from a periodic statement

Generally this one will apply to a missing credit to an account. If the case of a debit card transaction, if the merchant promised a credit or refund and failed to provide it, it is a Reg E error. If the merchant did not make such promised, but the customer feels they are entitled to one, it is a merchant dispute.

iv. A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer

This would probably occur due to an error in processing your transaction file and it not related to the debit card dispute process.

v. The consumer's receipt of an incorrect amount of money from an electronic terminal;

If your customer receives the wrong amount from another bank's ATM, it's your job to investigate. Don't send your customer to the other bank.

vi. An electronic fund transfer not identified in accordance with Secs. 205.9 or 205.10(a or;
vii. The consumer's request for documentation required by Secs. 205.9 or 205.10(a) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists under paragraphs (a)(1) (i) through (vi) of this section


If the cardholder is not sure what a debit card purchase is, it's your job to help identify the source of the funds either by filing a retrieval request, contacting the merchant, or filing a chargeback.


Merchant disputes not covered by Reg E would include things like merchandise ordered but not received, cancelled recurring subscription, defective merchandise, wrong merchandise received, service not rendered.

Although not covered by Reg E, your contract with VISA or MasterCard does require that you make every effort to assist the cardholder in resolving these merchant disputes, either by working directly with the merchants or using the chargeback system.
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#2186529 - 07/23/18 08:31 PM Re: Reg E claim or Merchant Dispute? CARM9
Compliance NABW Offline
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Joined: Oct 2015
Posts: 1,668
Appreciate this breakdown, Brian, Well done.

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#2186557 - 07/23/18 11:25 PM Re: Reg E claim or Merchant Dispute? CARM9
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,694
Illinois
Thanks.
Just note this thread is 7 years old so make sure to note the citations reference the fed rule prior to the FPB and now would be 12
CFR 1005.
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Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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#2186597 - 07/24/18 03:14 PM Re: Reg E claim or Merchant Dispute? BrianC
Compliance NABW Offline
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Joined: Oct 2015
Posts: 1,668
Originally Posted By BrianC
Thanks.
Just note this thread is 7 years old so make sure to note the citations reference the fed rule prior to the FPB and now would be 12
CFR 1005.


Yes, indeed.

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