If we are investigating an error and give provisional credit and an error did occur, when we take back the credit, (because the merchant also credited the account) does our letter have to state institution will honor checks, drafts, or similar instruments payable to third parties and preauthorized transfers from the consumer's account(without charge to the consumer as a result of overdraft) for five business days after notification.

All I can find is that the letter must state this if an error did not occur, and we revoke the provisional credit.

Thank you

If the merchant already reimbursed the customer, there is no error for you to correct, so the requirements of section 1005.11(d) apply.

The language is required depending on what option your bank uses for debiting of provisional funds. If you are debiting the provisional credit when you send the final notification, it must include the language regarding honoring checks, drafts, etc. for 5 business days after the notice date. If you debit provisional funds 5 business days after the notice is sent, and include the date funds will be debited in the letter, you do not need to include it.

Hope this helps.