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#1521973 - 03/15/11 06:03 PM Reg E -how to process this type of dispute(credit)
Dora T Offline
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Joined: Mar 2011
Posts: 2
A customer calls in that they received a credit for the wrong amount. What steps do we need to take to be in complinace with REG E?

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eBanking / Technology
#1522068 - 03/15/11 07:30 PM Re: Reg E -how to process this type of dispute(credit) Dora T
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 5,975
Illinois
Is the credit coming in via ACH or a debit card return?
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#1522218 - 03/15/11 08:58 PM Re: Reg E -how to process this type of dispute(credit) BrianC
Dora T Offline
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Joined: Mar 2011
Posts: 2
It is a debit card return.

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#1522244 - 03/15/11 09:36 PM Re: Reg E -how to process this type of dispute(credit) Dora T
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 5,975
Illinois
Under Reg E, the answer is "It depends." The question to ask the cardholder as part of your investigation is, "Did the merchant promise the credit to be X instead of Y?"

If the answer is yes, then it is a Reg E error defined as (ii) An incorrect electronic fund transfer to or from the consumer's account;

If the answer is no, then this is solely a merchant dispute and is not covered by Reg E.

Either way, VISA/MasterCard rules will also come into play during your investgation. For a Reg E dispute you cannot require anything more from the customer than the notification of the error, but VISA/MC will require additional documentation. VISA/MC both will require that the cardholder first contact the merchant and attempt to resolve the dispute directly. If this is not successful, the cardholder must write a dispute letter stating their efforts to contact the merchant and the merchant's response. Also if the cardholder has a credit receipt, this should be included with the letter.
If the merchant provided a credit receipt, you must wait 15 days from the date of the receipt to file a chargeback. If the merchant did not provide a receipt, you must wait 30 days from the date the cardholder first contacted the merchant about the error to file a chargeback.

Use VISA Code 85 Credit not Processed or
MC Code 4860 Credit not Processed

You can only file the chargeback for the difference between the amount that was refunded and the amount the cardholder is due.
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