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Reg E for Pending Transaction Disputes

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Question: 
We have members that want to dispute transactions that are pending against the account but have not posted/cleared the account. How does Reg E apply to this?
Answer: 

Technically, no. A transaction for Regulation E purposes hasn't "happened" until it has posted to the consumer's account. So the customer doesn't have a valid dispute until that time. I have seen instances involving restaurant purchases where the pending transaction amount exceeded considerably the consumer's "tab," caused, of course, by a feature used by many merchants whose employees are routinely tipped that adds a percentage of the bill to the authorization amount requested. There have also been what appeared to be duplicate pending transactions. By the time the dust settles and the transactions actually post, the restaurant transaction agrees with what the consumer authorized and the duplicates fade away.

Depending on the claim volume your credit union is processing, you might decide to accept "pending" claims rather than ask members to resubmit them later. Of course, that will mean you'll need to clarify what the member actually expects with regard to the transaction or make a follow-up call once the transactions actually post.

First published on BankersOnline.com 5/16/11

First published on 05/16/2011

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