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#2232421 - 03/05/20 05:00 PM Provisional credit draining from account
nu2regs Offline
Member
Joined: Mar 2013
Posts: 77
We have a case were the provisional credit was provided ($1000) , investigation concluded authorized transaction, went back to reverse and $ was gone. This seems to be a more common occurrence and most of the time the bank ends up writing off. Is there anything the Bank could do to help deter this?

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eBanking / Technology
#2232428 - 03/05/20 05:17 PM Re: Provisional credit draining from account nu2regs
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
Reg E protects the consumer. The only way to avoid the customer using the provisional credit during your investigation is to complete the investigation prior to the 10th business day when provisional credit is required.
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#2232465 - 03/05/20 07:21 PM Re: Provisional credit draining from account BrianC
nu2regs Offline
Member
Joined: Mar 2013
Posts: 77
Brian - thank you for your quick response... If I could bother you with another question, when a customer uses their debit card information within a P2P application like "Cash App" or "Square" and our customer comes back to state a transaction was not authorized... does this also fall under Reg. E? Thanks again.

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#2232467 - 03/05/20 07:30 PM Re: Provisional credit draining from account nu2regs
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
The answer depends on what information was compromised to result in the unauthorized transactions.

If the customer's debit card number (the access device you issued) was compromised and a fraudulent cash app account established, you are responsible for the investigation requirements under 1005.11.

However, if the customer asserts that their cash app ID & password was compromised (the access device that Square issued) then Square is responsible for complying with 1005.11 because they are considered an EFT service provider under 1005.14.

The challenge is that without knowledge of which access device was stolen, the path of least compliance risk for the bank is to investigate the claim if you don't know what actually transpired. This is a good training point for your front lines to ask questions about the nature of the claim at the time the dispute is initiated.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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#2232468 - 03/05/20 07:40 PM Re: Provisional credit draining from account BrianC
nu2regs Offline
Member
Joined: Mar 2013
Posts: 77
What if the customer is disputing the transaction being unauthorized and not the fact the app was compromised in anyway. Would something like this fall under Reg. E where we would need to investigate, provide provisional credit, etc. because our debit card number was used in the app?....Or would that fall under Cash App/Square...

Thanks again...

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#2232515 - 03/06/20 02:35 PM Re: Provisional credit draining from account nu2regs
nu2regs Offline
Member
Joined: Mar 2013
Posts: 77
Thanks for the help....re-read the citations provided after educating myself on these cash apps outside of our mobile banking product and its crystal clear now.....

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