Answer:
Answer by Randy Carey:While not specifically addressed, the commentary to 205.11(c) indicates:
"6. Correction of an error. If the financial institution determines an error occurred, within either the 10-day or 45-day period, it must correct the error (subject to the liability provisions of Section Section 205.6 (a) and (b)) including, where applicable, the crediting of interest and the refunding of any fees imposed by the institution. In a combined credit/EFT transaction, for example, the institution must refund any finance charges incurred as a result of the error. The institution need not refund fees that would have been imposed whether or not the error occurred. "
The regulation addresses provisional credit at 205.11(c)(2)(i):
"(i) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice."
I believe that one could assume that if you have to give them back interest, you would also have to give them back any fees at the time you provisionally credit the account. The idea is to make the customer whole (less the $50 at your option) while you continue the investigation.
Answer:
Answer by David Dickinson:You do not have to provide the refund of fees (making them completely whole) at the time of provisional credit, only interest at that time. However, if you find they are right (there was an unauthorized debit), you do need to make them completely whole (refund all fees as if it never happened) in a final credit. Most institutions don't want to provide two credits, so they provide interest and fees at the time of provisional credit.
Answer:
Answer by John Burnett:Technically, the refunding of fees has to be completed by the time you complete your investigation and finalize any provisional credit given. I do, however, agree with Randy's read on the "spirit" of the regulation -- making the consumer whole while you complete your investigation; however, it's not a violation to exclude fees from the provisional credit and refund them as part of the final adjustment of the error.
First published on BankersOnline.com 12/07/09
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