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#2251949 - 04/07/21 04:16 PM Reg. E - Dispute: Prov Credit Final, then Reversed
TeamComply Offline
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Customer files dispute with bank 8-24-20 for an unauthorized online purchase (believes card # was stolen), bank gives provisional credit within 10 business days. Bank sends dispute to our core processor to investigate, investigation is completed and notice is sent to customer 9-10-20 indicating provisional credit is now final. At the time, bank is unaware that merchant issued a refund on 9-8-20. Then on 9-11-20, bank sends another letter indicating the provisional credit has been reversed, as a result of the merchant issuing a refund. Can the bank really do this (after sending notice to the customer saying provisional credit is final)?

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#2251953 - 04/07/21 04:54 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
rlcarey Online
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Galveston, TX
You reverse the merchant credit and not the Reg E credit. Since you stepped into the merchant's shoes - the credit now belongs to the bank.
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#2251984 - 04/07/21 07:44 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
John Burnett Offline
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You cannot reverse your credit to the customer after you have made it final. Final is final.

Some would argue that you can't unilaterally take the merchant's credit to the consumer's account. Common sense suggests you can, though.

Some banks have added language in their deposit contracts that would provide for recovery by the bank from the extra credit provided by the merchant.
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#2252518 - 04/16/21 07:58 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed John Burnett
TeamComply Offline
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Is there a specific regulatory citation within Reg. E that states that once provisional credit is made final, it can't be reversed? Thanks!

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#2252521 - 04/16/21 08:27 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
rlcarey Online
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rlcarey
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Galveston, TX
Someone does not understand the word "final" or something?

Sorry could not help it. No - not if someone is looking for something in black and white in the regulation.
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#2252522 - 04/16/21 08:28 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
BrianC Offline
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Illinois
1005.11(c)(2)(iv) (iv) Reports the results to the consumer within three business days after completing its investigation (including, if applicable, notice that a provisional credit has been made final).

Oxford Dictionary:

Complete: 1. finish making or doing.
2. make (something) whole or perfect.

Final: 1. coming at the end


There is no other way to interpret this part of the Reg. When provisional credit is final, your investigation is ended. You cannot reopen an investigation that is ended.
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#2252524 - 04/16/21 08:31 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
BrianC Offline
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Illinois
Randy, my wife used to be a teacher. A lot of kids asked for extra credit after the "final" exam. Yeah, that ship sailed several weeks earlier in the semester.
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#2252527 - 04/16/21 08:42 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed BrianC
TeamComply Offline
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Thanks BrianC. This is helpful!!

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#2252909 - 04/23/21 08:45 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed TeamComply
Andy_Z Offline
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The key problem here is that when you finalize a claim, it's done. The "provisional credit" no longer exists because it is a final credit now. So the consumer gets a deposit, and the bank takes that amount from the consumer. There is no authorization to take money from a customers account just because the bank wants it. There is an allowance to debit provisionally credited funds, but those no longer exist. So the bank is not taking provisional finds, it's taking the consumer's money.

"Oh that's unjust enrichment!" It might be, but that is a civil court matter and to get those funds that way, the bank needs to go thru the court.

The bank can appeal to the consumer and some might say, yes, it's the bank's money please take it. And some will laugh as they hang up the phone.
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#2253303 - 04/30/21 06:21 PM Re: Reg. E - Dispute: Prov Credit Final, then Reversed Andy_Z
madukes Offline
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madukes
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Flyers Country
I disputed a charge on my credit card; the company charged me for the order with no anticipated ship date. I waited a month to see what would happen and then requested they cancel the order and refund my money. This went on for 2 more months - they said they would refund then didn't hear from them again.
I contacted my credit card company and explained what happened; they credited the funds back to my card. A month later I got the refund from the company. I waited a couple weeks, both credits were still there so I called my credit card company again and told them the refund went through and they could reverse their credit (December).
I still have both credits.

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