Answer:
If the consumer (assuming it is a consumer) files a Reg E claim for an unauthorized transfer, you need to resolve the claim in the specified 10 or 20 business days. If you can't, provisional credit may be necessary. In this case it sounds as though you have a valid claim because the EFT was canceled, I assume with the merchant, and according to their established procedures.
Also, look at Section 205.10(c) for stops on preauthorized transfers under Reg E. A preauthorized transfer is one that is authorized in advance to recur at substantially regular intervals. The question didn't indicate this was recurring.
First published on BankersOnline.com 10/05/09
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