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#2270054 - 05/04/22 07:38 PM Reg. E Disputes and Investigation Timeframe
TeamComply Offline
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Bank utilizes its core processor to handle dispute investigations. So bank receives dispute, submits documents/information to core, and they investigate. They then provide investigation documents (usually merchant documents) to support that the transaction is/isn't valid. When they respond, they tell us to review the supporting information, and if necessary submit a second chargeback within 7 days. After this seven day window expires, the option to submit a second chargeback goes away within our core.

Under Regulation E, we are required to report the results of the investigation to the consumer within 3 business day. So how does the above play into this? And wondering where/how our core came up with the 7 days timeframe?

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#2270156 - 05/06/22 02:57 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
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Anyone have any thoughts on this??? Thanks.

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#2270157 - 05/06/22 03:04 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
Valley girl Offline
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My thought is that the 7-day response your core is providing to you is the Visa or MasterCard dates for timely submission - nothing to do with your Reg E process. When you get the merchant response, there should either be enough evidence to deny the claim, or not enough evidence to resolve the issue. If you choose to go to pre-arb, you would not notify the consumer because the case isn't resolved yet. If you choose not to go to pre-arb, you need to inform your customer that you have made a decision.

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#2270160 - 05/06/22 03:22 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
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Thanks. And when we get the merchant response, we should be determining whether there is OR isn't enough evidence within 3 business days, so we can comply with the requirement to notify customer of outcome within three business days, if we do in fact have enough evidence. Correct? We can't wait until day 5, 6 or 7 (since our core gives us 7 days) to act on this, or we would then be out of Reg. E compliance, even if MasterCard allows for 7 days for timely submission for a second chargeback. Am I thinking through this correctly?

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#2270162 - 05/06/22 04:06 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
Valley girl Offline
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That depends. Is there any other resource you can use to resolve the claim if the paperwork from the merchant isn't conclusive? If not, make your decision and let you customer know within the 3 days.

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#2270164 - 05/06/22 04:43 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
burkemi Offline
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we are required to report the results of the investigation to the consumer within 3 business day

If your investigation is still active, then this piece doesn't come into play just yet. Your investigation isn't complete because you are reviewing information and supplying supporting information and....investigating.

If you receive this information and it is clear that the dispute is resolved, you can't hold on for 7 days because you are no longer investigating.

For the most part, it really is just what it sounds like. Are you still actually investigating or are you not? (and still within time frames) That will answer your question.
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#2270165 - 05/06/22 04:57 PM Re: Reg. E Disputes and Investigation Timeframe TeamComply
BrianC Online
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Illinois
Visa/Mastercard require that a pre-arbitration be filed 15 calendar days following second presentment. Your processor likely shortened the timeframe they give you for providing documents to ensure that they can keep up with their workflow and file pre-arbitration cases timely.

When you file a chargeback, one of three things will happen:
1. The merchant fails to respond. Once the timeframe for the merchant to provide additional information elapses, you then can decide in your customer's favor and have three business days to notify your customer of the results of the investigation.
2. The merchant represents with documentation that leads you to conclude that no error occurred. You have three business days to notify the customer in writing that you are denying the claim, revoking provisional credit, will honor overdrafts for five business days after revoking provisional credit, and that the customer has the right to request copies of the documents you relied on to deny the claim.
3a. The merchant represents with documentation that leads you to conclude that an error did occur, and the bank accepts financial liability. You have three business days after reaching this conclusion to notify the customer of the results and you take a loss.
3b. The merchant represents with documentation that leads you to conclude that an error did occur, but you believe the merchant should be held responsible for the loss. You have three business days to notify the customers of the results. You also ask the customer for an updated letter refuting the merchant's representment so you can file pre-arbitration within your processor's timeframe so you can try and recover funds for the bank. (Note the customer's failure to provide an updated letter does not give you the right to deny the Reg E claim.)
3c. The merchant represents with documentation, and you still cannot determine whether or not an error occurred. You contact the customer to request additional information as needed to allow you to file a pre-arbitration request within your processor's timeframe and keep your Reg E investigation open pending receipt of additional information. (Note if the customer fails to provide additional information, and you do not have adequate documentation to determine an error did not occur, you must side with the customer since the absence of information is not adequate to deny a claim.) Once you receive additional information from pre-arbitration or the merchant accepts financial liability and doesn't respond, you notify the customer within three business days of making your determination. (Note, if the pre-arbitration/arbitration process drags beyond day 90 from the date of initial notice, you must close the Reg E investigation and make a decision at that time and notify your customer within three business days of day 90.)
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