Reg E Denial

Where would I be able to find verbiage specific to the bank's ability to deny a Reg E claim?

Scenario:

Disputed transactions are all within area local to residence. Card was temporarily blocked due to bank's third-party fraud service, at which time customer was contacted by third-party fraud service, and confirmed a transaction at a convenience store. Customer later disputes a number of transactions, one of which includes a transaction at same convenience store moments earlier, leading us to believe that not only the transaction disputed at the convenience store but all transactions involved are not truly fraud. When looking at the transactions, given the timing and locations in relation to the verbally-confirmed transaction it can pretty much be mapped out that the customer was traveling around the area making purchases.

Just want to make sure that we're able to substantiate a denial, and be proactive about our grounds for denial. I'm thinking that we'd need material proof to deny rather than opinion, because although the single transaction was confirmed by the cardholder as legitimate, that didn't validate any of the disputed transactions.

As far as verbiage detailing your ability to deny, you won't find any. Only that you must investigate and provide the results of your investigation.

---My interpretation only---

Are these PIN-entered transactions or credit transactions? Does the customer normally visit the merchant locations? If credit transactions, have you requested signed receipts from the merchants? (You can also request signed receipts from non-disputed transactions to see if the signatures match.)

You are required to investigate the claim.

1005.11(c)(4) - Investigation. With the exception of transfers covered by § 1005.14 of this part, a financial institution's review of its own records regarding an alleged error satisfies the requirements of this section if:

(i) The alleged error concerns a transfer to or from a third party

Requesting signed receipts of disputed and non-disputed transactions within the same time period will strengthen your denial if your assertion that the customer completed the transactions is correct. Additionally, if these are PIN transactions that occurred during the same time period this also strengthens your denial, assuming your customer states he/she has never supplied the PIN to anyone. The review of the financial records, proximity, timing, and normal place of business (if the customer frequently visits the merchant locations) satisfies "a financial institution's review of its own records." Anything you can gather to strengthen your denial is better.

My advice is to issue provisional credit and request signed receipts of the disputed and some non-disputed transactions. If your assumptions are correct this may provide your proof (even if all he/she does is sign with squiggles - as long as they match up). Once you have the receipts, send the customer the results of the investigation (we also include the documentation we used to deny) and reverse your provisional credit.

If these are all small-dollar transactions that don't require signatures, you're probably better off issuing credit for the transactions, closing the dispute, and moving on