A customer called and left a message on an account officers telephone claiming that a $65 transaction at a local restaurant on his account (10 days ago) was not authorized. We know he frequents this establishment alot (and can be difficult to talk to at times!). We haven't been able to get ahold of him to ask if he didn't like the service (which he has done before) or if his card was illegally swiped.

If we write him a letter, asking him to explain why he feels the transaction was unauthorized and we don't hear back from him are can we send him a letter stating that he must respond withing so many days or we will deny the claim?

I would send the letter asking him to come in and fill out a WSSUP, and move form there. I wouldn't do anything based on a voice mail.

I would recommend you start your investigation. Given you have very little to work on, if that is all you have, that is all you have. But you have identified the customer, the account, it sounds like you'll know the "when" and what the customer thinks is an error.

§205.11 Procedures for resolving errors.
(b) Notice of error from consumer —(1) Timing; contents. A financial institution shall comply with the requirements of this section with respect to any oral or written notice of error from the consumer that:

(i) Is received by the institution no later than 60 days after the institution sends the periodic statement or provides the passbook documentation, required by §205.9, on which the alleged error is first reflected;

(ii) Enables the institution to identify the consumer's name and account number; and

(iii) Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section.

Just to add to what Andy said, you have five days from the day the voice mail was left on your system to investigage and grant provisional credit. The clock doesn't start when you get the WSUPP, it starts when you get the information. He told you it was unauthorized so you have to take him at his word until and unless you prove otherwise.

Andy Z. We have had similar situations. Our operations department requires the customer to provide us with written notification - we tell them this when a consumer calls in- Sometimes, we never receive a written response. Are we still obligated to come to resolution. Or, are we only allowed to withold provisional credit?

I'm not Andy but . . .

The reg is clear. Notification can be oral. If a customer calls and says, "this is John Smith and there's a charge on my debit card for $25 at SearsMart on March 1st that I did not do." You have been notified and you must start the clock. You have 5 days to grant provisional credit and 10 days to make a final determination.

The reg doesn't give you the option of requiring writen notification.

We have the person taking the call fill out the WSUPP and send an unsigned copy to operations. When (if?) the customer comes in and signs we replace the unsigned copy with the signed one, otherwise we retain the unsigned copy.

I understand that notification can be made orally, but if the bank also requires written notification, and the customer doesn't comply, the bank can withhold the provisional credit. However, the bank is still obligated to investigate the claim.

Greg is correct. Oral notification is all that is needed. You may require a written notice. If not received you don't have to pay provisional credit if you go beyond the 10 days allowed, under Reg. E.

Greg does mention 5 days to resolve the dispute, a few posts above. But that is a debit card rule for Visa, I believe. "E" will give you 10.

You can only enforce the 10 day written notice request (and refuse to provide provisional credit) if you inform the customer at the time he makes his oral notice that you require it to be put in writing.

When the customer left the V-mail, he left the oral notice. Your officer's greeting, I'm sure, did not say "You must put any Reg. E error claims in writing and get it to us within 10 days in order to obtain provisional credit." So you can't use the rule.

What is WSSUP? WSUPP?

Written Statement Under Penalty of Perjury. It's a form that is required for returning certain ACH's such as unauthorized or authorization revoked. Our bank (as I'm sure others have) decided to combine all Reg E. disputes like ACH's and Debit Cards to a single form. This way, the customer can still write on the form what the dispute truly is like Visa tends to require.

On this same subject - A customer notified us last month about a unathorized transaction using their debit card in January. The merchant (in another state) debited the account for 1,500.00 instead of the correct 150.00. He filed a dispute and we began to research it. The customer called us back 6 days later and said the merchant agreed the error was his fault and cut him a check, so go ahead and tear up the dispute form he signed. Our audit department says we have to send him a written explanation denying his claim because it was resolved.

Can we just place a note in the file that it was resolved by the customer, or do we legally have to send him a written explanation (that he resolved it himself!)?

You made a determination that the transaction would stand as entered. I believe you should complete the dispute file with a letter or notice to the customer confirming that the dispute was withdrawn pursuant to his phone call that the merchant had corrected the error.

If the customer had given you the word in writing, I would not have bothered with the closing letter.

It's a nit-picking requirement, but your examiner will question you if you don't have the documentation.

I have to agree with John. Under 205.11(d) you have to send a letter if you determine that no error occurred or it was different than claimed. You said you denied it. Using a closing letter is a good way to describe what happened and how you came to your decision. If this isn't the way the customer sees it, it provides the opportunity to correct it, if needed. It is a good summation for future reference.

Our chargeback center requires a signed statement of dispute by the cardholder before they will even start. So even if the cardholder called they are still going to have to sign the form. We do go ahead and give PC. So far never had anyone not come in and sign.

Reg. E is the bottom line law. Your agreements with vendors, merchants or third parties do not matter to Reg. E. You can do more, but not less. You can tell the customer there may be a quicker way for them to get their money and to get it all with no $50 liability. But the wheels of Reg. E had to be put in motion when you were notified.

Can you clarify for me? Under Reg E, a financial institution must provide the customer provisional credit within the 10 day timeframe and procede to research and finalize the dispute - all without a signed affidavit or WSSUP. However, for certain ACH return reasons, NACHA requires a WSSUP to complete the case. Is there another type of affidavit/form that is available to complete without the customer's signature that will cover the financial institution from any loss?

I can't answer your question except to say that Reg. E doesn't require any form from the customer and they tell you that you don't need it to investigate a claim. NACHA rules and those from Visa/MasterCard are separate agreements and may impose additional restrictions/benefits. But the bottom line is, you can't do less than Reg. E requires.