Under reg E 12 CFR 205.11 (c)(1)the part that covers reporting the result to consumer within 3 business days after completing investigation also cover reporting results to the consumer on ACH debit transactions such as insurance drafts etc? Or is this covered somewhere else?

Thanks for your help

Requests are mine not my employer

It covers any investigation into an alleged error on a transaction covered by regulation E. That, of course, includes ACH items.

Maria - I had a similar question on this forum many moons ago, but didn't receive a reply. In the past two years, I started conducting some ACH audits. Before that time, I never knew much about the process. I have learned that the folks returning these items are usually not the same people who handle Reg. E error resolutions for debit/ATM cards.

ACH error resolutions covered by Reg. E fall in the following categories:

1 - R07 Returns - Authorization Revoked: These are typically the internet service provider, the tanning salons, gyms, etc. that customers join and then later quit. When the companies continue to debit their accounts, they sign an affidavit at the bank stating that the authorization to debit their account has been revoked and the bank returns the item R07.

2 - R10 Returns - Unauthorized: The customer signs an affidavit that the third party was never authorized to debit their account.

So far in my audits, I've observed that banks simply get the affidavit signed, initiate the return, and refund the money - end of story. I've not seen anyone state that the credit is "provisional" nor have I seen a "final" follow-up.

Reading the ACH Rules [OR Subsection 5.1.7], an ODFI (originating bank) has up to 5 banking days after the settlement date of your R07/R10 return to "dishonor" it. Perhaps a bank should state that the credit is provisional as of the date of return and once the deadline for dishonoring the return has passed, notify the customer that the provisional credit is final.

John and SLC

Thank you so much. Your response was what I was looking for in clarification concerning the customer notification. I wanted to confirm that written customer notification may be required in the procedures for the ACH disputes not just the ATM/Debit card situations. Also the customer written notification should reflect that once the investigation has been completed, the customer will be notified if the account will be re-adjusted accordingly.

Thanks again.

Opinions are mine not my employer

Maria--One of the common violations I find when conducting compliance reviews is failure to remind the customer in the final letter that they have the right to look at the documents we used in making our determination. Sometimes banks also do not remember that they have to pay NSFs for five days at no charge, up to the amount debited, if they take back provisional credit. FYI!