I have always thought that Regulation E didn't allow banks to charge a fee for a return of an unauthorized ACH entry to a consumer account, but noticed on two of our competitors terms and conditions that are on their websites that they both charge a fee for this. Did something change or did I not understand that correctly?

Your consumers are initiating ACH debits to other consumers? Are you sure those are not business account charges for those businesses that are initiating ACH entries?

No, I'm talking about ACH debits that are posting to our customers' accounts where we are the RDFI. If our customer says they have an unauthorized ACH post to their account and sign a Written Statement, we return the item as unauthorized but we do not charge and thought we couldn't charge for that.

Dangerous road:

Official Interpretation

11(c) Time Limits and Extent of Investigation

3. Charges for error resolution. If a billing error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to any aspect of the error-resolution process (including charges for documentation or investigation). Since the Act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the good-faith assertion of errors that might result if charges are assessed when no billing error has occurred.