Can anyone help with some Reg E guidance? In some cases the claim does not seem likely. For example the accountholder states their card has not been out of their possession and their PIN is stored in their memory however a local PIN based transaction is disputed. A transaction causing an overdraft seems to be a common thread a times too.

In this type of situation can we document how we do not believe there was an unauthorized transaction and deny the dispute after our investigation, and if so, what pointers do you have for this?

Or would we have to give the account holder credit? Any guidance is appreciated.

Gas pump skimmers could account for this. In our area, they are getting card numbers and PINs. Several skimmed cards were used at a bank ATM a few miles away, so locally. Although you may believe they are not unauthorized transactions, the burden to prove it is on the financial institution. Depending on where the transactions happened, you may be able to get video proving it was your accountholder, or signed receipts. If you can't get any further evidence that it was your cardholder, you will need to reimburse the customer.

I have numerous stories/examples of PIN based transactions where the card is still in the customers possession. But even if they wrote their PIN number on the back of the card or on a piece of paper, that doesn't make the customer liable.

Unfortunately, regulation E doesn't provide any guidance as to what must occur in an investigation - all it says is that you must conduct an investigation. The only thing it does say, however (and as David noted), is that negligence cannot be used to deny a claim. From the commentary to 1005.6(b)

"2. Consumer negligence. Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E. Thus, consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer's liability for unauthorized transfers. (However, refer to comment 2(m)-2 regarding termination of the authority of given by the consumer to another person.)"

I completely understand that some claims "don't seem likely," but you have to keep in mind that Regualtion E is extremely consumer friendly, so it is alway best to error on the side of/in favor of the consumer. In fact, USAA was just hit with a huge penalty for not error on the side of the consumer for Reg E disputes. While some of there practices were more of a UDAAP concern (making the customer jump through hoops they didn't disclose and hoops that are not permitted under Reg E), the CFPB consistently cites violations of Regulation E in their enforcement action. (For a summary of lessons learned from USAA's recent enforcement action, take a look at my article here: https://www.compliancecohort.com/blog/lessons-learned-from-usaa-reg-e-amp-udaap.)

All of that said, the biggest "tip" I have is to keep in mind that there is nothing preventing you from cancelling their debit card privileges or even closing their account - after you conduct your investigation and refund them if applicable. (Except that the USAA enforcement action makes it clear you shouldn't discourage a claim by telling the consumer their account may be closed due to the investigation.)