In Regulation E, Sec. 205.11(c)(3)(ii) states that the applicable time is “90 days in place of 45 days under paragraph (c)(2) of this section, for completing an investigation, if a notice (A) . . . (B) Resulted from a point-of-sale debit card transaction; (C) . . . .” This means under these circumstances, banks have a right to wait 90 days instead of 45 days to provide a final credit. Could someone tell me where “point-of-sale debit card transaction” is defined? Also, could you maybe provide some examples? Thank you!!

A Point of Sale transaction (POS) is any transaction involving an ATM or Debit card that is used to purchase goods or services. This can be done with a personal identification number(PIN) or a signature debit purchase (VISA/MasterCard).

Or put another way, any card transaction that is not an ATM withdrawal.

Although you are given longer to investigate these claims, you are still required to provide provisional credit within 10 business days if the initial notice and can require the dispute be in writing to qualify for the provisional credit.

Sorry for being dense. So, are all online purchases using a debit card going to be POS transactions?

I guess what surprises me is how the regulation is written. This "exception" ends up swallowing the majority of Reg E errors that we get, with the happy result that we get 90 days to resolve most errors instead of 45. (Point taken about the provisional credit, I believe we are doing that correctly).

When the regulation was written, debit cards weren't what they are today. Once upon a time the bulk of the errors you would see were ACH or ATM.

You are correct, that online puchases, web payments, phone payments, etc. using the card are considered POS. I don't consider that being dense, I consider it being careful. In this regulatory environment, you don't want to be explaining why you're blowing off timeframes to your examiner.

I also recommend checking your Reg E policy/procedures. When I started processing debit card disputes my bank's procedures stated that we would complete ALL investigations in 45 days. I almost got nailed on an internal audit for not following internal procedures even though they were far more generous than the Reg. Needless to say, new procedures were approved by our board the following quarter.

Thanks for the explanation and advice!!

X

You are welcome, and also welcome to the site. You'll find a wealth of knowledge and opinions here.

I am not quite getting a definitive conclusion on a related issue. Under the debiting provisional credit guidance, do all typles of transactions need to be honored during the 5 business day period, or only certain types? Are POS transactions, ATM withdrawals, etc. excluded because they are not "checks/drafts/similar" instruments?

They are all "similar" instruments. So the answer is yes.

You need to look at the entire citation which was not provided to Randy.

"Notify the consumer that the institution will honor checks, drafts, or similar instruments payable to third parties and preauthorized transfers from the consumer's account"

An ATM withdrawal is not payable to a third party. A check payable to cash or the customer that they want to negotiate over the counter is not payable to a third party. The purpose of this requirement is to make sure the Bank honors items that I may have initiated prior to the revocation of the provisional credit because I didn't know that would be happening.
POS transactions are payable to a third party so these would have to be honored. The challenge is your system is likely not sophisticated enough to deny ATM withdrawals but honor debit card transactions during the 5-day period so you may end up allowing one to ensure compliance with the requirements for the other.

Thank you both. BrianC - that was my understanding as well regarding the intent, and I was confused that it would include ATM, as they are not payable to third parties.