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#2249940 - 03/02/21 01:09 PM Debit Card Credits after Account is closed
Likes to Comply Offline
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Joined: Nov 2008
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In the mountains
What is the bank's responsibility regarding debit card credits received after a checking account is closed? Is a cashier's check for the credit sent to the former customer? Is there a time limit or a dollar amount limit? What if the account has been closed for some time and we no longer have a good address?

I am interested in reading up on this, I just don't know where to go. Thanks in advance!
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#2249944 - 03/02/21 03:07 PM Re: Debit Card Credits after Account is closed Likes to Comply
BrianC Offline
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BrianC
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Illinois
If you are able to get the money to the former customer, then do so. If you cannot, then you would escheat the funds to your state in accordance with the timeframes and law of your state.
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#2249945 - 03/02/21 03:13 PM Re: Debit Card Credits after Account is closed Likes to Comply
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In the mountains
Is this required somewhere? Visa rules, state rules? Where should I read up on the subject. I'll likely have to defend what you have stated above.

Thanks in advance!
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#2249946 - 03/02/21 03:19 PM Re: Debit Card Credits after Account is closed Likes to Comply
BrianC Offline
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BrianC
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Illinois
There's nothing to read in Visa rules. There is no mechanism in Visa rules for returning a credit to the merchant so you are stuck with the funds. You should contact legal counsel to provide information on state escheatment laws which apply to any customer funds that you are holding regardless of how they came to be in your possession.
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#2249948 - 03/02/21 03:25 PM Re: Debit Card Credits after Account is closed Likes to Comply
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,016
Dallas, TX
Why wouldn't the funds be returned with an "Account Closed" code?
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#2249949 - 03/02/21 03:33 PM Re: Debit Card Credits after Account is closed Likes to Comply
BrianC Offline
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BrianC
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Illinois
M Cockrell, this are not coming in via ACH, they are debit card credits. V/MC don't have the same mechanisms for returning items using chargebacks that NACHA does.
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#2249952 - 03/02/21 03:49 PM Re: Debit Card Credits after Account is closed Likes to Comply
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I went to Visa's website and see effective 4.17.21 there is a new response code - 46 "The account is closed" to be used for accounts closed by the issuer or the cardholder for any reason. This must be what M Cockrell is referring to.
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#2249954 - 03/02/21 03:55 PM Re: Debit Card Credits after Account is closed Likes to Comply
BrianC Offline
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BrianC
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Illinois
That could be. However, those response codes are used when declining an authorization attempt. A merchant does not perform an authorization when processing a credit, they just send the money and there is no chargeback code for sending back a credit.
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#2249956 - 03/02/21 04:01 PM Re: Debit Card Credits after Account is closed Likes to Comply
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
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Dallas, TX
Thanks for the clarification.
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