This may be a common occurrence, but it is a new one to me. We have a customer that is disputing an ACH debit from roughly six months ago stating the company debited her for more than she authorized. We are WAY past our 60 day timelimit to return the debit. Are we able to make the customer responsible for the portion of the debit that she did authorize, understanding we have to write the rest off to losses? Or, must we write the entire amount off? She admits she authorized a portion, admits she owed the money to the company..surely she is responsible for at least that portion, right????

What does your account disclosures say? We say they have 60 days from the date of the statement being mailed to notify us of any errors. I can't imagine not having something like that in your account disclosures.

Note the definition of an "unauthorized electronic funds transfer."

Reg E 1005.2(m) Unauthorized electronic fund transfer” means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit...

The customer received benefit in that they now own less to this entity. Since this is not an unauthorized EFT, the liability schedule in 1005.6 does not apply. It would meet the definition of an incorrect electronic funds transfer, but Reg E 1005.11(b)(1)(I) states that you do not have to investigate if the customer does not notify you of the error within 60 days of the delivery of the statement on which the error appears. Since the customer did not meet their obligation to notify you of the error timely, you do not have to investigate and the customer is not entitled to any money back.

Our disclosures do say 60 days, but timely notice only serves to limit the customer's liability. It is my understanding that a customer can file a Reg E dispute with no limitations on timeframe, according to Reg E. Notice after the 60 days simply means they are potentially responsible for transactions that occurred beyond 60 days past the date the statement was mailed on which the first unauthorized transfer occurred. We do not refuse a Reg E dispute simply because it is reported past the 60 day timeframe. We do, however, use it as a gauge to determine how much the customer is responsible for, if anything.

In this case we are only dealing with one transaction, so there are none that occurred 60 days past the date the statement was mailed. As far as I am aware, we will either have to eat all of it, or at least the portion beyond what the customer claims she authorized.

You are correct not to refuse a Reg E claim since there is no statute of limitations for reporting an unauthorized charge. See my response above. Based on your description, I do not believe that this meets the regulatory definition of an unauthorized charge.

Okay, Brian...just so I understand...because it was an incorrect entry, not unauthorized, we may hold the customer responsible for the entire amount as notice was given to us beyond 60 days, correct? If this customer had claimed that the transaction was totally unauthorized, we would have to write it off, correct?

Correct...with one caveat.

Although the Bank would be liable if the transaction was truly unauthorized, since the notice was late and 1005.11 does not apply, you would not have to provide provisional credit or complete your investigation in 45 days. Since you are outside your window to return the item, you could still choose to contact the ODFI to request information about the authorization that was obtained to debit the account. The ODFI is required under NACHA rules to contact the originator and get the signed authorization. This would enable you to determine if your customer was telling the truth. Also, if the originator failed to obtain an authorization, some ODFIs will allow you to initiate a late return rather than face a NACHA rules violation.