Do we have any recourse if we do not believe the customer's claim about an unauthorized debit card transaction or must be eat the loss?

If you can investigate the claim and prove the customer authorized or benefitted from the transaction(s) in question then you can deny it; otherwise, you can always deny them a card in the future (assuming this is a claim involving a payment card).

prove the customer authorized or benefitted from the transaction(s)

Well, that is a little strong. I think make a reasonable conclusion would be a better choice of words.

Touche! The value of semantics is often underrated. Thank you for the correction.

What would constitute a reasonable conclusion that the customer authorized or benefitted? Can you deny because you have no evidence that suggests it was either unauthorized or authorized (so basically, you do not know either way, all you have is the customer's assertion of a claim)? What would be provided to the customer if he enacted upon his right to copies of the documents relied upon to deny the claim?

ATM video, receipt signatures, etc.etc.etc.

You need something to substantiate your conclusion. It doesn't have to be a slam dunk, but it has to be enough to show that your conclusion is based on a reasonable analysis of the facts and evidence available to you. What particular evidence is available will vary depending on the nature/time/location of the trasaction.

Scenario: Dispute of the amount of the EFT where bank initiated a Visa claim and merchant asserted amount was correct (no documents/receipts to rely on or video).

So the customer is claiming the transaction should have been processed for a different amount?

What documentation did the merchant provide in response to the dispute? If they are fighting the dispute, they should provide more than "because I said so". Perhaps one of our Reg E gurus can confirm this, but I'm pretty sure Visa would require the merchant to supply supporting documentation at this point.

Yes, customer is claiming the transaction is for a different amount. From what I understand, it is a Visa claim and the customer has not completed a written signed affidavit. Also, from what I understand, Visa rules require the customer to sign something to compel the merchant from producing documentation. Reg E rules do not place this burden on the customer. So bank cannot process a chargeback and connot perform any other investigation. So, assuming all the information above is accurate regarding what Visa requires, what is bank's conclusion? What reasonable basis can the bank deny the claim?

While the bank cannot file a chargeback, VISA does permit the bank to file a retrieval request without a customer signature to compel the merchant to produce a sales receipt to aid in your investigation. If the merchant fails to provide the receipt in 30 days, you may file a chargeback on the basis of the merchant's failure to comply with the retrieval request.

Thank you Brian. Now let's say same scenario, bank filed a retrieval request, merchant failed to provide within 30 days and bank then proceeds to file a chargeback...all this time the reg E clock is ticking. On day 45, still no answer regarding the chargeback or even arbitration. Can the bank deny the claim? If yes, on what grounds?

happy -- I hate to jump on you for this. If it's a Visa chargeback involved, it's undoubtedly a POS debit card transaction, which gives you a 90-day window under Reg E.

John, that is fine...I have only been given bits and pieces of the information related to this claim so I am not 100% clear on all the facts at this point. I was trying to "fill in the blanks" just for purposes of my main concern, which is, was the claim denied inappropriately.

What I do know is the claim was initially denied when the reg E timeframe ran out due to lack of a definitive answer. However, it appears the bank was still pursuing the claim through Visa. Later, the claim was approved after arbitration and the bank received the funds back from the merchant. I do not have all the facts of what happened in between. My main concern was the claim was improperly denied initially. Thoughts based on the limited information?

I agree that denying a Reg E claim due to "lack of documentation" is a violation. That tells me the bank waited for written confirmation, never received it and never investigated. The comment to 1005.11 states:

1. Compliance with all requirements. Financial institutions exempted from provisionally crediting a consumer's account under §§ 1005.11(c)(2)(i)(A) and (B) must still comply with all other requirements of § 1005.11.

If you haven't investigated when you deny the claim, you haven't complied with the "other requirements" of 1005.11.

Thanks Brian.

Do you consider merely "researching" or looking at the customer's transaction history, which gives no insight for a reasonable conclusion in the scenario above, an investigation?

The interpretations to 1005.11(c) are pretty clear with respect to VISA transactions.

3. POS transfers. When a consumer alleges an error involving a transfer to a merchant via a POS terminal, the institution must verify the information previously transmitted when executing the transfer. For example, the financial institution may request a copy of the sales receipt to verify that the amount of the transfer correctly corresponds to the amount of the consumer's purchase.

Transaction history can play a part in your decision. For example, if you have a customer who makes a $300 withdrawal on payday every Friday at the same ATM, but the $300 withdrawal last Friday at that same ATM was unauthorized. There you may choose to conclude that the transaction was legit.

With any Reg E claim you deny based on assumptions and intuition rather that proof, you are making a risk based decision.

Thank you for confirming for me what is required.