For the transaction to be considered a Reg E error under 1005.11(a) the transaction must either be unauthorized or incorrect. In this instance, the customer authorized the charge and was charged the correct amount so Reg E does not apply.
The 120 days clock for VISA either starts ticking from the date of the transaction or the promised delivery date whichever is later. The Bank does not have to file a chargeback until it is satisfied that the circumstances meet VISA's criteria. You do have a contractual obligation to assist the customer if they provide the documentation VISA requires to dispute the charge.
This is a great example of the types of questions I will be answering in my upcoming webinar next month. VISA and Reg E Error Resolution
I am offering a similar session for Mastercard issuers. Mastercard and Reg E Error Resolution
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