Reg E Final Notice

A customer disputed a transaction on 4/11 and the 90 days were up on 7/10. We (the bank) gave her provisional credit on 4/13 for her disputed transaction and sent her the final letter on 7/10. Because of a collection letter I received concerning this item, I became aware that the merchant issued credit to the customer back on 5/22. So the customer has two credits, one from the bank and one from the merchant. The collection agency is asking us to allow a representment to go through for the charge-back. Since I sent the customer a final letter, is it too late to reverse the provisional credit we gave her?

I'm not understanding where the collection agent comes into play, but I wouldn't have qualms about sending a carefully worded letter stating to the effect that you received final credit on May 22. We were not aware of this when we also paid you credit for the same claim on July 10, when we made our provisional credit final. As you had already been paid, we are debiting $X on ___ .

The intent of a Reg E claim is to make the consumer whole, not allow them to profit from the claim.