How does your bank handle debit card disputes? We are constantly running into issues with providing provisional credit and then reversing that credit once we receive notice from the merchant that the charge is valid 30 days later. If these charges are significant the client is usually not prepared for the reversal of the provisional credit.

Has your bank found a better practice for this?

It's the same all over, tadurkin. The "not prepared for reversal" is anticipated by the regulation where it requires you either give the consumer a 5-day notice before reversing the provisional credit or notify the consumer that you will honor items payable to third parties without additional charge (no OD fee) if the item would have been paid had the reversal not been made.

Just remember that just because a merchant represents doesn't mean you can automatically deny the claim, it just means that you most likely don't have chargeback rights. Reg E is between you and your customer, chargebacks/retrieval requests are just a way to attempt to determine if the customer did the transaction or to recover funds so the bank doesn't take the loss.