We are in the process of investigating an unauthorized ATM transaction on a new account. We gave the customer provisional credit but they want to close the account. I want to tell the customer not until the investigation is complete but I can't find any supporting documentation.

I don't think you have to give provisional credit if you can conclude your investigation within the 10 days. I am not sure if there is anything you can do to stop them from closing the account once you give them the credit.

how new is the account? if it is really new you get 20 days instead of ten.

(i) The applicable time is 20 business days in place of 10 business days under paragraphs (c)(1) and (c)(2) of this section if the notice of error involves an electronic fund transfer to or from the account within 30 days after the first deposit to the account was made.

The customer gets full use of the funds. If they close the account, there isn't much you can do to stop them. There is no allowance in E for this to influence your investigation.

But they can delay the provisional credit for 10 days while they investigate correct?

Yes. Provisional credit (under Reg E, Visa rules differ to 5 days and some states do too) need not be paid until business day 10 on a normal claim. New accounts go 20.

If the claim isn't resolved and the consumer was told what had to be done to get provisional and did that, or if the bank made no request for the consumer to do anything else such as provide a written claim, provisional needs to be paid. When paid, the use of funds are unrestricted.

If the claim isn't resolved and the consumer was told what had to be done to get provisional and did that, or if the bank made no request for the consumer to do anything else such as provide a written claim, provisional needs to be paid. When paid, the use of funds are unrestricted.


Are you saying that if we sent them a form to sign or asked them for support and we did not receive it we don't have to give provisional credit? Another question I have is on error resolution. ATM withdrawal. Bank where it was done denies the claim. How can the bank say it was authorized just because someone had the card and based on this does the bank take a loss?

Trebor, let me make sure I am understanding your situation. You charged an ATM transaction back to a foreign bank for it being unauthorized?

Someone used a foreign ATM with our card. Customer filed an Error Resolution claim stating he did not do the transaction. We had our vendor go back to the bank where it was transacted and the bank denied this claim because a card was used. My question is do we, the customers bank, take the loss based on this response?

unfortunately yes your bank takes the loss. Did the customer lose the card or is this a counterfeit transaction?

Backing up, if you request a written claim and tell the customer where to send it and by when, if they don't do that on time provisional credit isn't required by you. You can't require a police report and I am hesitant to say they must complete a form you'll send them. Too much of their time is lost in you sending out a form.

In this case, what you described sounds like a loss to you. And don't forget that if this wasn't an approved access device, the customer has no liability, not even $50.

Lets review. Customer does not respond in writing as we require nor do they respond to our request for additional information within the ten days from the oral notification. Therefore, as I understand this we DO NOT have to give provisional credit ever on this transaction but still do the research. If they come back with it on the e.g.18th day we still do not have to provide the prov. credit and they have to wait until we complete the investigation. Correct? Our vendor is giving the PC when the written response comes in.

I believe you are correct.

You always have the option to provide PC when the written confirm arrives, even after the 10 business days. But if it arrives after 10 business days, Trebor, you are correct that you don't have to provide provisional credit (but do have to continue pursuing the investigation to an efficient, speedy conclusion).