I have an interesting situation I'm looking for input about.

We have a customer who has initiated a claim for a credit that never posted to his account. The customer made a purchase with his VISA debit card and was charged for the item. Subsequently he returned the item. The merchant has not issued credit for the returned goods.

During our investigation, we have learned that the merchant did receive the merchandise back but has declared bankruptcy and any credit to the customer will be handled through the courts.

My question is - do we have the right to reverse our provisional credit to the customer and inform him that he will have to pursue his claim through the courts?

Your thoughts are appreciated!

-- Tony

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The opinions I express here are mine and not necessarily those of my employer.

www.geocities.com/twade

I would say that you would be within your rights to conclude that no error (as that term is defined in Reg E) occurred and reverse the provisional credit. The customer is trying to put you on the hook for what is their liability.

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Jim Bedsole, CRCM, CBA, CFSA

Opinions expressed are my own, and do not necessarily reflect those of my employer.

In a prior life, I handled credit card merchant accounts. Although I've tried really hard to block that from my mind, I seem to recall that we were very careful in the merchants we established the services for because if they failed, we were on the hook for outstanding entries.

Those were credit cards with consumer protections under Reg Z. This is a debit card, without those protections.

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Al Miller, CRCM
Fremont Bank (CA)
(510) 790-5825
(510) 505-5211 FAX

Opinions expressed are my own and not necessarily shared by my employer.