Answer:
The question here as it pertains to Reg E, needs to focus on the refund being the disputed transaction. The transaction to make the purchase was authorized. There is no dispute there, but if a refund was promised and not delivered then that is an error.
Next, if she was in fact allowed to rescind the transaction and the company promised a refund which didn't come thru, that is a Reg E error. "An incorrect electronic fund transfer to or from the consumer's account;" I'm not positive we have the refund date, but we'll answer this based on what we do have.
The bank was notified orally on March 16. The 10 business day clock started then and assuming there is no new account exception the bank had until March 30 to complete the investigation correction must be effected by March 31. Since a written claim was requested and received by that date, provisional credit was due March 31. The bank could then take until May 3 (45 calendar days) if that provisional credit had been paid. If this was a POS transaction a time frame of up until June 19 would be allowed, being 90 days. These dates are the longest under Reg E. Visa rules could require a 5-business day provisional credit.
A key issue is, was a refund promised? If that wasn't done by the company, there is no error at all and the claim would be denied. The original charge was an authorized transaction. Merchant disputes are not a part of Reg E though Visa and Mastercard rules may get involved. Also, if a credit card was used, Reg Z may be involved and those rules are more forgiving than Reg E.
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