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Provisional Credit & the Questionable Customer

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If a customer is claiming fraud on his/her account and the bank has good reason to believe that the customer is not being truthful concerning the transactions in question, does the bank still have to give the provisional credit under Reg E?

If the bank can complete its investigation within the prescribed 10 or 20 business day period, make any required correction by the next business day and notify the consumer within three days of completing the investigation, no provisional credit would be necessary, but the bank's mere suspicion concerning the customer's honesty negates neither the customer's rights nor the bank's responsibility for adhering to the requirements of the regulation.

First published on 6/22/09

First published on 06/22/2009

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