Regulation E

We recently had outside auditors audit our Regulation E disputes. They mentioned that after our debit card processor gives us credit for our requested chargebacks, we need to send a final letter to our cardholder within two business days rather than wait the full 90 days. I've been working with POS disputes for over three years and this is the first I've heard of this. What are your thoughts?

Just because your processor gives you credit does not mean they won't hit you with a representment later on once the merchant has a chance to respond to the chargeback. Once your are presented with difinitive evidence that a charge is unauthorized, then yes, you should close the investigation. IMO geting credit from your processor does not quailify as difinitive evidence.

I concur. YOu have an obligation to close the investigation as soon as you can (you can't simply go to the deadline if there's no reason to do so), but you should be assured the investigation is completed before assigning that status to the file.

I'd add that it isn't over until it is over. When you get credit, what is happening in the investigation? If you stop doing anything and so do others connected with this, then it is over. But if you're still reviewing authorizations, photos, etc. than the claim is still ongoing and you don't want to call it to an end. When you send that letter, it is over. As John noted, you can't just sit on your hands though, watching the calendar.

If I recall correctly the rule is Three Business Days after you discover any new information, or receive information you must advise the consumer.

The usual way a credit becomes final is simply the time frame for the merchant/FI to dispute your claim expires, you have three business days from that date to close the claim.

It depends:
§205.11(c)(10 day investigation) The institution shall report the results to the consumer within three business days after completing its investigation. The institution shall correct the error within one business day after determining that an error occurred.

§205.11(c)(2)(ii)(45 day investigation) Informs the consumer, within two business days after the provisional crediting

(iii) Corrects the error, if any, within one business day after determining that an error occurred; and

(iv) Reports the results to the consumer within three business days after completing its investigation (including, if applicable, notice that a provisional credit has been made final).

**They mentioned that after our debit card processor gives us credit for our requested chargebacks, we need to send a final letter to our cardholder within two business days rather than wait the full 90 days.

Thanks Andy for posting the portion of the REG with the time frames.

For-OP: When your processor gives you credit for your initial chargeback that is usually PROVIOSIONAL credit, pending their merchants response/representments etc. I don't your auditors ment that you have to close the claim within two day of the PC date (unless your REG E time frames have expired). The REG allows you your full 90 days for a reason, so you, the bank does not suffer an undue loss.

You would need to close the claim three business days from the date the PC expired, if your REG E timeframe expires sooner then YES you need to close the claim regardless of where your at in your investigation with the card issuer.