Debit Card - POS Dispute Time Frame

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Question:

We recently had a customer notify us via phone call of a POS transaction debiting his account that he did not make. We gave him his Provisional Credit; however, he did not give us the necessary paperwork for us to file with our processor until 6 calendar days later. We are now approaching 45 days since the customer notified the bank. I called our processor about the time frame and I was told the 45 days time frame was Reg E only and did not apply in this case since they had requested a receipt copy from the merchant. She told me the merchant has 30 days from the date the processor filed the request to respond. My question is how do we proceed once we reach the 45 days since the customer notified the bank if we have not received the response from the merchant? Dates: Customer Notified Bank 5/25/11 Dispute Filed with Processor 5/31/11 Processor Submitted Copy Request 6/8/11

Answer:

Reg E Section 205.11(3) provides timeframe extentions up to 90 days if the dispute:
(A) Was not initiated within a state;
(B) Resulted from a point-of-sale debit card transaction; or
(C) Occurred within 30 days after the first deposit to the account was made.

Provided that your Reg E disclosure includes this extension, you have until 8/23/11 to complete you investigation. Whether using the 45-day or 90-day timeframe, if you have not completed your investigation when the Reg E timeframe has expired, you will have little choice but to finalize the provisional credit. You cannot reverse the provisional credit if you obtain information that the customer's claim is invalid once the credit is final. You may present the evidence to the customer an ask their permission to debit the account in this situation, but you cannot revoke the credit with their consent.

First published on BankersOnline.com 8/8/11