Timeline for Claim Notice

Question: I am trying to determine when the 10th business day is when a claim is filed. The way I see it the claim's first business day is the day you receive the claim, so you would count that day as your first day. There is someone else who believes the first business day starts the day after you receive the notice, so you wouldn't actually credit the customer until the 11th day. Please let me know where I can find the answer to this.

Answer: I went to the experts on this one. Mary Beth Guard, Executive Editor of BankersOnline.com wrote:

The general rule of legal construction is that you don't count the first day. HOWEVER, since neither the rule nor the Commentary make that clear, it is safer to err on the side of caution and start counting on the day the claim is made. So, if a claim is made on Wednesday, you start counting on Wednesday.

      (c) Time limits and extent of investigation-(1) Ten-day period. A financial institution shall investigate promptly and, except as otherwise provided in this paragraph (c), shall determine whether an error occurred within 10 business days of receiving a notice of error. The institution shall report the results to the consumer within three business days after completing its investigation. The institution shall correct the error within one business day after determining that an error occurred.

I also received a response from Andy Zavoina, CRCM, one of the experts on staff at BankersOnline.com:

The regulation says: Section 205.6(b)(5) Liability of consumer for unauthorized transfers. (iii) Written notice is considered given at the time the consumer mails the notice or delivers it for transmission to the institution by any other usual means. Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account has been or may be made.

   And Section 205.6 Liability of consumer for unauthorized transfers. Paragraph 6(b)(5) -Notice to Financial Institution1. Receipt of notice. A financial institution is considered to have received notice for purposes of limiting the consumer's liability if notice is given in a reasonable manner, even if the consumer notifies the institution but uses an address or telephone number other than the one specified by the institution.

   Determining when it is received is important in my opinion. A customer in a different time zone, or across the international date line needs conversion steps so you know the local time you were notified.

Final answer? This is similar to rescission under Reg. Z. When it is put in the mail box; when the "Send" button is clicked; or when the voice mail is left; the liability is on the bank and the clock has started.

Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 14, No. 11, 1/05