Dispute and Error Resolution

Are there situations under Reg. E (disputes or errors) in which the bank can verbally inform the customer about the outcome of an investigation or is this always required to be done in writing?

Written notice is only required if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the consumer:

So if the error the customer claims occurred in the same manner/amount, we can orally notify customer that our investigation is final?

Most banks (ours included) are in the habit of providing written notification. This gives documented evidence, while a verbal notice does not. Notification IS required, so why not just use the method that also leaves documentation? And clears any confusion as to when you should or shouldn't notify verbally.

Good point, I agree. I'm just trying to determine in a particular scenario if written notification is actually required or if the verbal notification we provided would be acceptable in this situation:

1) Dispute submitted - customer had an unauthorized charge for an item she had ever requested and she had not received the product either, customer then contacts us (before investigation is complete) and tells us she received product and merchant was willing to work with her on a refund. In other words, the customer worked this out directly with the merchant, so could we verbal inform her that we're closing our dispute case?

We have this situation come up as well, and we still send a letter, something along these lines:

We received your debit card/merchant claim on XX/XX/XXXX in the amount of $X.XX. Based on your instructions to us on XX/XX/XXXX, we have canceled your dispute against the merchant. As a result, provisional credit in the amount of $X.XX was reversed on XX/XX/XXXX. This case is now closed.

In my experience, it is best practice to notify in writing. How else would you document to an auditor/examiner that you notified the customer the case was closed. What if you responded orally and then, God forbid, the customer comes back and says she didn't understand that you would be closing. Especially true if the refund hadn't even been received yet. We have a template that we use for this kind of notification so it only takes a minute or two (ok, maybe five minutes with walking to the printer and preparing an envelope).For me, it is well worth that time investment to avoid any potential extra scrutiny.

But, to offer a more direct answer to your question, your investigation leads to an assertion that a different error occurred than that initially disputed (fraud, I didn't get anything is now fraud, but I received it, returned it, and the merchant refunded). Since it is a different error than originally reported, written notice is required.

(d) Procedures if financial institution determines no error or different error occurred. In addition to following the procedures specified in paragraph (c) of this section, the financial institution shall follow the procedures set forth in this paragraph (d) if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the consumer:

(1) Written explanation. The institution's report of the results of its investigation shall include a written explanation of the institution's findings and shall note the consumer's right to request the documents that the institution relied on in making its determination. Upon request, the institution shall promptly provide copies of the documents.

Sounds more like a withdrawal of the unauthorized claim to me, which you would maintain evidence of the withdrawal in your dispute files.

In either case... evidence = documentation; documentation = notice in writing.

If you want to be consistent - sure. But if the customer sends you a message that says - I have resolved my dispute with the merchant, I think you are done.

To clarify: when you say the customer contacts you, do you mean orally or in writing (email, perhaps)? If that were the case we would probably still send a written confirmation, but for others that could be overkill.

For us, it's always; regardless of how the customer told us. Email, in-person, phone call - doesn't matter. We'll send a letter and keep a copy in the file.

And in a situation where customer disputes for example $500.00 initially, then contacts bank and says, he was mistaken about disputes and only needs to dispute $400.00, so we reverse $100.00 provisional credit given, then complete investigation and determine the error did occur and remaining $400 of provisional credit is now final. This scenario would require written notice, as the outcome found was different from the dispute of $500.00 initially filed by the customer?

Or a scenario where customer disputes 2 charges, merchant gives customer partial refund, does this require written notice to customer?

TeamComply: for your first scenario, yes. You absolutely need to notify the customer that the $400 is now final. I assume you already notified the customer when you reversed the provisional credit.

In the second scenario, I'm not certain I understand what you're asking. How are you resolving the claim? We would send a letter informing the customer that the provisional credit for $123 is being partially reversed since they received a credit for 100. I can't speak to the difference between the original amount of the provisional credit and the amount the merchant refunded. If you determine it isn't eligible for reimbursement, I would list that amount separately from the amount you reversed due to the merchant credit