It has been brought to our attention that our interpretation of Reg E liability and how long a customer has to notify the Bank was incorrect. If a consumer would come to us and tell us they had an unauthorized transaction from two years ago, we would turn them away because they were notifying us outside of 60 days from when we mailed their statement.

We now understand a consumer has no time limit on when they can report the unauthorized transaction. For example, if the consumer had an unauthorized transaction on a statement from two years ago and they legitimately state they are just seeing today and reporting it to the Bank today, the Bank will be liable for that transaction. However, our vendor will not allow us to send disputes to them that are outside of 60 days so we have to take that loss. Or is there another way to file the dispute with the vendor to get paid?

For recurring transactions our examiners stated the bank is liable on the first two transactions, even if they're from two years ago so those are the two we need to do the dispute on. In the past we were still filing the dispute for recurring but according to the examiners not on the correct two transactions. Should have been the first two and we were doing it on the last two. Same situation as above though, the vendor will not allow us to send disputes that occurred greater than 60 days. If it's a recurring charge do some of you just send the two most recent charges to your vendor to get paid but then do the actual dispute paperwork for the consumer on the first two charges? This is only if the charges are the same throughout the entire two years.

Thanks!

Reg E doesn't care about any recovery limitations your institution may have through NACHA, VISA or Mastercard.

Operating rules for all of these require that you reimburse the customer for any successful return items. You cannot reimburse yourself for recoveries made on recent transactions to offset losses from earlier transactions. If you elect to try and recover on the recent transactions, then you are choosing to go above and beyond Reg E requirements for limiting your customer's losses. Another possible reason for filing claims on recent transactions is to see if you can obtain information that leads you to conclude that the early transactions were legitimate and that no error occurred which allows you to deny the entire claim.

Since 1005.11 does not apply to transactions for which you do not receive timely notice you do not have to provide provisional credit or complete your investigation within Reg E timeframes. In absence of recovery options through your vendor, your only other option is to contact the merchant/originator directly in an attempt to gain additional information about the alleged error.

In cases like this, agreed with BrianC, we have to refund the customer regardless. Depending on your issuer, you have an extended time period to file those charges. VISA allows for 120 days.