Customer authorized a trial offer in December for $4.95 not realizing that if she didn't cancel she would be charged $99.98 per month after 30 days. Received her next statement and saw that she was charged $99.98. She said she didn't know that she had to cancel and didn't know she would be charged a monthly fee. We sent a dispute but it was denied. Can we take back the provisional credit given to customer?

If not seen ACH returns be denied. Do you mean debit card?

Yes, I do mean debit card.

Reg E requires that you investigate to determine if an error occurred. If the documents obtained in the course of your investigation conclude that the customer authorized the charge and failed to cancel according to the terms and conditions to which they agreed, then you can use this as a basis to deny a claim.

Thank you Brian.

The authorization to get the sample will likely have the cancellation requirement. Then it's a simple determination that she said she didn't cancel and as far as Reg E is concerned, it's an authorized transaction. That should be doable before provisional credit is to be paid.

If I had a dime for every time we encountered this issue because they wanted the trail of vitamins and didn't read the fine print at the bottom about cancelling.......well, you know....

What if the customer won't provide you with the initial authorization documents?

An internet search using the merchant name, toll free number, etc. whatever you have in the debit card record will often yield the terms and conditions on the merchant's website to which the customer agreed. If you can't find/obtain the initial authorization, your other options are to contact the merchant directly or attempt a chargeback as the merchant will likely provide a copy of the contract and proof that the product was shipped to your customer. Of course, the chargeback option will take longer than 10 business days so you will need to provide provisional credit while waiting for the merchant's response.

I have found that most of these merchants are happy to share information including the ship to address and tracking number.

ComplyGuy, the customer has no obligation to assist you in the investigation. Personally, that would make me more skeptical because if I want my money back, I'd send you what I had.

The merchant, as noted, is often very willing to assist because this is the easiest way for them to resolve the matter instead of going thru chargeback procedures.

We have had a number of these disputes lately, and what we're finding is that the documentation from the merchant doesn't prove the customer actually authorized the purchase. For instance, the merchant provides terms, but the S&H amount doesn't match what our customer was charged. The terms provided are not dated, so how do you know the terms provided were actually in effect at the time the customer may have signed up for the free trial? On the address confirmation they provide, it only shows the city/zip code where the product was shipped- it doesn't actually show a street address. On the confirmation email they provide, it states that it's an example of a confirmation email, but it includes our customer's name/address- why would it have this, if its an example- seems like it is potentially fabricated? We've also had the merchant provide the exact same documentation for different product charges.

Also, if you go the FTC's website, there are many, many enforcement cases against these free trial cases. So, knowing this, I'm not sure how you can deny a dispute IF the customer claims they didn't authorize the transaction and their card never left their possession... Or if they say they cancelled and were still charged.

Many of the subscription merchants tell the customer that they need to return the unused product and in order to do so, they need to get a merchandise return authorization. If the customer says they don't have the authorization number, I call the merchant to get the number.

I am not sure why you would want to interject the bank into the middle of such a mess?