The regulation state: (2) Forty-five day period. If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided the institution does the following:

(i) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. If the financial institution has a reasonable basis for believing that an unauthorized electronic fund transfer has occurred and the institution has satisfied the requirements of § 1005.6(a), the institution may withhold a maximum of $50 from the amount credited.An institution need not provisionally credit the consumer's account if:

(A) The institution requires but does not receive written confirmation within 10 business days of an oral notice of error; or
[/b]


It was my understanding that we had to post a PC if we were not able to resolve the investigation period. Now I am reading that if the FI requires documentation, but doesn't get it, they do not have to post a PC. So does that mean we have to have the investigation completed within 10 business days? I also thought we were not allowed to require a customer to submit anything in writing and that we still had to conduct the investigation and if not completed within 10 bdays post a PC. What am I missing?


Thanks!

"Now I am reading that if the FI requires documentation, but doesn't get it, they do not have to post a PC."

Receiving written confirmation of the error has little to do with them providing you any requested documentation.

so explain the difference? If I ask a customer for documentation of the orally reported error and they don't, I don't have to post a PC? Then do I need to have the error resolved within 10 bdays? I always thought that if we don't have the investigation completed within 10 bdays we HAD to post a PC to get the additional 45/90 time extension..

You can ask them for written confirmation, but that is just something in writing saying, the transaction for $100 on xx/xx/xx was not authorized. If you require written confirmation and they fail to provide it, then you do not have to give them PC, but that does not mean that you do not get the 45/90 days to resolve. What you cannot do is ask them for more than just written confirmation (i.e., documentation) and predicate PC of the receipt of that documentation. I think it comes down to as to what and how you are defining "documentation".

So if I don't post the PC then I don't get the 45/90 to resolve the investigation, right? So if the customer doesn't submit the requested documentation then I don't have to post a PC but I have to resolve investigation within the 10 days, right?

No - the only thing written confirmation of the error from the customer determines is whether or not you are required to give them PC. It does not impact any other investigation timeframes.

You are still using the term "documentation" without definition of what you are referring to. The term "documentation" in not used in 1005.11 when referring to information coming from the customer to the bank - only when information is being passed to the customer.

So if I ask the customer to send in an affidavit confirming the error, details around the error etc and they don't send in the affidavit, I don't have to post a PC however, I don't get the additional timeframe to review the claim (45/90), so I have complete my investigation within 10 business days, right?

The affidavit is the documentation I am referring too.

If you don't receive written confirmation of the error within 10 business days, the requirement to provide provisional credit in 1005.11(c)(2)(i) goes away as noted in 1005.11(c)(2)(i)(A). This does not negate the extended investigation time afforded you in 1005.11(c)(2) or 1005.11(c)(3).

Again, be careful. As Randy notes, all the written confirmation has to be is a letter stating "I didn't authorize this charge on this date. Signed: Your customer." You can't require an affidavit under penalty of perjury, copies of receipts, or other supporting documentation as a condition of investigating the claim.

Thanks Brian.. just to clarify, while I may not have to post a PC if they don't confirm the error in writing as requested, I am not given the extension of time (45/90) to investigate, right? So I would need to make my determination of the investigation within 10 bdays, correct? Or is it they don't return the requested documentation, I don't post the PC and I still have 45/90 days to complete the investigation?

You will still have 45/90 days.

So I can have the 45/90 days to review even if I don't post the PC due to not getting requested documentation back, right?

We've been posting a PC even if they didn't return the requested document to ensure the additional time needed to investigate. Based on what is stated above, we don't necessarily have to do that, is that correct?

Again, I think we are getting caught up on the term "requested documentation." You can request that the customer provide the dispute in writing, but you have to be careful about what "documentation" you request. For example, some banks have gotten in big trouble for requiring a police report as part of the dispute process.

So to answer your question, yes, you still have the 45/90 days to investigate even if you don't provide provisional credit because they didn't provide you with their dispute in writing.

Also, let me try to explain this another way. When a customer disputes a transaction orally, you have to begin your investigation. At this time, you can (but don't have to) request that they provide their dispute in writing. All this written request does is determine whether or not you are required to provide provisional credit. If they provide the dispute in writing, you either have to resolve the investigation in 10 business days, OR you can extend it to 45/90 days if you give them provisional credit. If they don't get your the written dispute within 10 business days, you can still extend your investigation to 45/90 days but you are not required to provide provisional credit. Basically, if you can't resolve your investigation within 10 business days, you can extend it to the 45/90 day time-frame whether or not they provided the dispute in writing. The only thing the written request of the dispute does is determine whether or not you are required to provide provisional credit.

You are not required to give provisional credit if you request the dispute in writing and they don't provide it to you within the 10 business day time-frame. You do, however, need to continue investigating the dispute, which you can extend to 45/90 days.

Adam.. thank you so much!

So if all they do is orally dispute a transaction, then you don't have to post a PC and you can still have 45/90 days to investigate. If you request the documentation, they don't respond, no PC required and still get 45/90 days, right? dang light bulb moment. I thought the PC was required if you were not able to complete the investigation within 10 bdays and that was the only stipulation.

Just to clarify, you do need to reserve the right to ask for the dispute in writing - meaning this should be disclosed in your EFT disclosure. If you didn't disclose it, you can't not give them the PC. Also, you do need to ask them for it in writing. I wouldn't just not provide PC because they orally disputed a transaction and you didn't also ask for the dispute to be in writing.


Correct (assuming all the caveats I already said).


It is, unless you asked for the dispute in writing and they didn't provide it.


Some banks don't worry about the written statement at all and just give provisional credit if they need to extend the investigation beyond the initial 10 days to 45/90 days. This can make things easier from a processing perspective.

makes sense! Thanks so much!

Our EFT disclosures states "....we may require it in writing within 10 business days". It is standard language and we cannot change the "may require" to "is required" unless we customize the form for a cost. We want to make it procedure that we always require it in writing for provisional credit purposes.

When customers call to report a dispute, we tell them that we require it in writing and we start the investigation upon receipt of an oral dispute. Is telling them orally that we need it in writing sufficient? Also, is requesting the dispute in writing by email or message through online banking acceptable?

Thank You.

(2) Written confirmation. A financial institution may require the consumer to give written confirmation of an error within 10 business days of an oral notice. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification.

As long as you "provide the address where confirmation must be sent", giving them additional option would not be a problem.

The "may require" language is right out of model form A3, so you should be fine.

"If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days."

As far as requesting the written notice, the rule isn't specific. Therefore, either oral or written notice should be sufficient (assuming you have a paper trail to prove you requested it).

"1. Notice to consumer. Unless otherwise indicated in this section, the financial institution may provide the required notices to the consumer either orally or in writing."

Thank you both.

We provide the address on the initial disclosure and let them know when they call. We can include it in the email or online message to those customers who don't call in.

I agree with everything said in the last 4 posts about "may require" written confirmation, but I want to clarify:
If a consumer doesn't provide written confirmation, you still must investigate under the strict timing provisions of §1005.11 and adhere to the liability limits of §1005.6. You just don't need to provide provisional credit.

If an institution does not provide provisional credit, do you believe this also relieves them of having to notify the customer in any way about the provisional credit. In other words, does the notification only then need to be delivered when the investigation is completed?

[(ii) Informs the consumer, within two business days after the provisional crediting, of the amount and date of the provisional crediting and gives the consumer full use of the funds during the investigation;]

This would not seem to be necessary, obviously, as no provisional credit is provided. However, it does seem to result in a lack of transparency to just let the "case" sit there with no provisional credit and no notice of why not.

Any requirement to advise the customer that you are not providing provisional credit is self-imposed.