We have a customer who recently bought a Tracphone. Tracphone contracts with another company "Smartpay" for the purchase and billing of hours. The purchase price is 33.15 a month for 15 mos, and 39.00 every 2 months for air time.
Smartpay took the initial 33.15 and then took 39.00 for the air time ( these were what was expected). Then three more times with a few days they took 39.00 eac time and applied it to the purchase price. Our customer filed a reg E but the department after researching and finding out the additional 3 withdrawals of 39.00 went to purchase price declined the claim because she had authorized the original transaction.

Just looking for another set of eye to review this.

Who 'declined' the claim?

We did

" the additional 3 withdrawals of 39.00 went to purchase price"

One can argue about whether she actually "authorized" these deductions to occur at this time (that would really depend on the language of whatever she signed or clicked on to consent to transfers).

But it would seem that even if the transfers were premature or not specifically "authorized" they are not "unauthorized" for purposes of Reg. E because she got a benefit from them. (They were credited toward the purchase price of the phone she bought.)

Definition of "unauthorized electronic fund transfer" in Reg. E Section 1005.3(m) is a transfer done without actual authority and "from which the consumer receives no benefit."

She did receive benefit and that is a Reg E condition, but she could argue the ownership payment was less and the company forced her to prepay the ownership. I suppose she should be discussing it with them, why so fast, why so much, and if she's not happy the BBB, attorney general or such would be her best avenue as it would truly be a contract issue.

She also needs to freeze these folks out of her account or switch accounts if this wasn't an error and it is how they do business.