Hi all!
Does anyone require customers to submit Reg E claims in writing, and if so, do you deny if not received within the 10 days?

Only if you want to suffer the consequences of the regulators making you re-open every claim denied for such cause for the last two years. A Reg. E claim does not have to be in writing.

Anyone that answers in the affirmative will be admitting a public forum that their institution violates Reg E.

CFPB Supervisory Highlights Fall 2014

Consumers may report an error either orally or in writing. Examiners cited violations of Regulation E at one or more institutions that, in the case of an oral notice of error, would wait until the customer had returned a dispute confirmation form before initiating an investigation. Examiners further found that at least one institution waited to request additional information until the written confirmation was received, and would require the consumer to respond to the request for additional information within 10 days of the original notice. Unless the consumer submitted the additional information requested within 10 days of the original notice, consumers would be denied their claim due to lack of information. At one or more financial institutions, examiners found that customers who complained about unauthorized transactions were told they must first contact the merchant, where applicable, before an investigation would begin.

Consistent with Regulation E, a financial institution may request written confirmation of an oral notice within 10 days of the notice.9 However, a financial institution must begin its investigation promptly upon receipt of an oral notice. The Official Interpretations further state that a financial institution cannot delay an investigation until the financial institution has received a
written confirmation.

Regulation E also sets forth the timing and content requirement to assert an error, specifically, sufficient information to identify the consumer’s name and account number and why the consumer believes an error exists, including, to the extent possible, the type, date, and amount of the error. A financial institution cannot deny an error claim on the basis of a consumer failing to provide additional information, or require the consumer to contact the merchant involved first.

Really? I was told that the Reg indicates a bank can require the customer to submit the claim in writing. Is this not accurate? If an account holder calls in to the branch and claims there are unauthorized transactions, but never comes in within the 10 days to complete the forms, we were told to deny. Not true??

Official Interpretation

11(c) Time Limits and Extent of Investigation

2. Written confirmation of oral notice. A financial institution must begin its investigation promptly upon receipt of an oral notice. It may not delay until it has received a written confirmation.

If you require written confirmation and so inform the consumer, if they don't provide it, you don't have to give provisional credit. You still have to complete your investigation regardless.

1005.11(b)(2) notes that we can require written confirmation, but as 1005.11(c)(2)(i)(A) goes on to point out, failure to receive written confirmation only eliminates the obligation to provide provisional credit. The Official Interpretations to 1005.11(c) make this pretty clear.

2. Written confirmation of oral notice. A financial institution must begin its investigation promptly upon receipt of an oral notice. It may not delay until it has received a written confirmation.

Rats, according to the threads, Randy was one second faster than I to press submit.

We usually rely on our card processor to help, but if they won't sign their dispute form we can't go that route. So, if they do not provide anything at all in writing we still have to investigate our own bank records, such as transaction location vs. where customer lives or works, is the transaction consistent with their location, do they frequent this merchant, was it to purchase items consistent with past purchases and those following, purchases consistent with their profession or hobby, did someone in their household or someone they know use the card who had access to it, did they leave their card out in the open in an unlocked car, did they authorized a free trial and did not cancel in time, did they give their card and authorize a transaction over the phone or internet by mistake through a scam, etc all this in trying to determine if they actually performed the transaction or if it was fraud/compromised card. If we can't determine by conclusive evidence or their admitting to actually authorizing the transaction, and we still believe they authorized it, we would be better to err on the side of caution and pay their claim because of how consumer-friendly Reg E is. It makes it easier when they agree to sign the dispute form, but it can't be required.

Does this sum up as how to best handle this situation?

MBTCompliance, your process sounds reasonable to me. I have found that most banks who rely on a third party to handle their investigations don't have a clue what to do if they don't get authorization from the customer and therefore cannot utilize the third party investigation. I have found that some incorrectly deny the claim because they can't conduct an investigation with their third party (this, of course, is in violation of Regulation E). Most find themselves stuck between a rock and a hard place and error on the side of caution as you have explained, though I doubt most dig as much as you have described.

The bottom line is that Regulation E requires an investigation regardless of who conducts it and regardless of whether the dispute was in writing.

Reopening this thread. We currently have a situation where someone has notified us in person with our dispute form completed but refuses to sign the form. If they continue in the refusal, does that mean we are not required to give provisional credit? We would still be required to credit the dispute even if the customer never signs the form, correct? I did not find where the regulation addresses a signature - that would make sense that a bank could require it since we completed the form with information from the customer, still I wasn't sure about the provisional credit. And there is debate as to whether we must credit if it turns out to be an EFT error - I say yes, we must investigate and credit if it truly is an error, not sure about provisional credit. This is an ACH transaction but it should not matter what type of EFT it is. Thanks!!

Not sure that a customer signature has anything to do with them giving you a written confirmation. Sounds like a bank imposed requirement.

I agree with Randy. The rule only talks about "written confirmation" and says nothing about a signature. We have seen an increase in penalties associated with restrictions above and beyond what is required in the regulation. For example USAA (and a few other banks over the years) required customers to complete their own internal form in order to provide provisional credit/conduct the investigation. In their consent order, the CFPB said this practice was above and beyond Reg E, and therefore, a UDAAP violation. The CFPB also had a problem with USAA's practice of (in some instances) requiring written statements to be notarized.

Therefore, I would consider the requirement of a signature as a condition of provisional credit (or an investigation) to be at high risk of a UDAAP violation.

I'm wondering WTH they are refusing to sign the form but want to submit disputes. Perhaps they aren't really unauthorized?

Thanks for your responses!!

P*Q, it is odd, however, the branch employee stated the customer said he shouldn't have to sign because he did not authorize the transaction, to which the employee responded that he was attesting to that very fact. He said signing the form increases his liability and also said, if anything that the bank should sign it because "we did it." I suppose some things may be confusing to some people, however, the form seems clear to me.

I would just be exiting the relationship after the dust settles.

Ditto to what Randy said.

Some people get wacky ideas off the internet. Others claim to have heard voices telling them of such things. That doesn't mean these folks are hiding anything. It just means their wiring or chemical balances isn't like yours or mine (although sitting in this office in my basement for hours each day may .....).