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VISA v. Reg E

Answered by: 
David A. Dickinson

Question: 
Our VISA Check Card department is encountering difficulty trying to figure out how to meet both VISA and Reg E requirements. For example, to initiate a charge back for a duplicate charge or wrong amount, VISA requires consumers to make a good faith attempt to resolve the dispute with the merchant prior to filing a charge back, but our Reg E folks tell us we are in violation of Reg E if we tell the customer this. How do other institutions balance the two when they are not in agreement?
Answer: 

When investigating and resolving EFT errors, institutions are required to follow the requirements set forth in Regulation E regardless of the bank’s contract with VISA or any other 3rd party. The only exception would be any liability or limitation more favorable to the consumer. If you are unable to receive reimbursement because VISA rules were not followed, that is a cost of doing business. To balance these requirements, you can ask customers if they have tried to resolve the dispute with the merchant, but you cannot require them to do so. Likewise, you can't require customers to put their disputes in writing under Reg E, but many VISA processors require this. Again, you can ask the customer to do so, but if they don't you must still resolve the dispute and may not be reimbursed for the amount of the dispute.

First published on BankersOnline.com 12/03/07

First published on 12/03/2007

Filed under: 
Technology
Filed under technology as: 
EFT

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