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Charging For Affidavit for Unauthorized ACH

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Question: 
My question concerning Reg E is....Are we allowed to charge the customer for furnishing an affidavit and acquiring signature claiming unauthorized ACH charge?
Answer: 

Review the wording of the Commentary to Regulation E, Section 205.11(c), specifically item 3: "Charges for error resolution. If a billing error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to any aspect of the error-resolution process (including charges for documentation or investigation). Since the act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the good-faith assertion of errors that might result if charges are assessed when no billing error has occurred."

You cannot exact a fee for anything having to do with the error resolution if the error occurred as claimed by the consumer. So if the ACH transaction was unauthorized (you credit the customer), you have to refund the fee.

I emphasized the last sentence of the Commentary excerpt for a reason. If you decide to impose a fee, make sure it is not so large as to have a chilling effect on the consumer's exercise of rights.

First published on BankersOnline.com 1/3/05

First published on 01/03/2005

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