I am currently auditing ATM/Debit Cards, and I would like some clarification regarding Reg E. Our Bank has decided to only pursue investigations for disputes that are under $20, so if the disputed amount is under $20, the customer is credited.

My concern is that the Accounting department is waiting until 45 days after the customer dispute before crediting the customer. My interpretation of Reg E is that if no investigation is taking place, that we must credit the customer within 10 (plus 1 additional) business days.

Accounting is waiting 45 days to issued the credit in case the customer files a dispute directly with the merchant and gets credited back from them, because once final credit is issued we can't take it back. Please advise if this is reasonable, or if we need to be doing the final credit for disputes under $20 that we do not investigate in the 10 business day time frame.

If you are not going to investigate the "de minimis" claims, you should be crediting the customer within a day of making the decision not to investigate. You don't take 45 days or even 10 days. Your investigation is finalized when you make the decision, and the crediting should take place by the next day.

Of course, you should keep a record of these "fast lane" approvals to identify any customers who decide to "game" your policy (and to show you've resolved the claims).

As for consumers who have also pursued a direct credit with a merchant and receive "unjust enrichment" in what amounts to a double credit, you have the right to pull back the funds from the merchant's credit to your customer's account. "Reversal of duplicate credit from merchant" is an apt description and it is not a reversal of the final credit from the customer's claim against the bank.

I'm trying to summarize high-level, logical initial steps relating to processing a debit card error under Reg. E and am needing a second (or third or fourth) opinion on whether the following is an accurate representation of how sections 1005.11 and1005.6 work together:

1. Determine which type of error is being asserted (Unauthorized or Incorrect)
2. Determine the 60 day cut off (60 days from the statement on which the transaction first appeared)
3. Determine whether customer notification was received within 60 days
4. For Incorrect claims: Notice outside of 60 days = do not have to investigate and may deny the claim; Notice within 60 days = must investigate and correct the error, if applicable
5. For Unauthorized claims: Notice outside of 60 days = must still investigate to determine whether the transaction was Unauthorized, but do not have to adhere to the timing, notice and provisional credit requirements of 1005.11. Timing of notification will also impact liability under 1005.6; Notice within 60 days = must investigate and must adhere to timing, notice and provisional credit requirements under 1005.6. Whether or not the loss or theft of an access device is involved will also impact liability tiers under 1005.6.

Thanks in advance.

Looks accurate to me.

Thank you, John. I really appreciate it.