Ask Mary: Is Final Credit Really Final?

Karen Sylvester

By: Karen Sylvester, AAP, CAMS, CRCM, NCP, Director, Compliance Education

After a Regulation E Dispute, can I take final credit back if we get a second presentment?

A scenario we often hear from our members goes something like this…My account holder claimed a debit card transaction to be unauthorized. We started the dispute process and filed a claim with our processor. We then sent a final letter and made provisional credit final. A few weeks later we were presented with the item again. Since the claim was refused can we take the final credit back?

As we can all agree, it does not seem fair for the financial institution to take a loss. However, that is why your investigation plays a major role. What should your investigation consist of to avoid taking a loss in scenarios like this?

  • Quickly acting upon the notification of unauthorized transaction
  • Requesting information about the authorization (realizing sometimes this costs more than the transaction itself, so it may not be feasible)
  • Initiating a chargeback of the item when warranted (thresholds and timeframes set by card rules may impact your ability to do this)
  • Maintaining logs or tracking of disputes to ensure they are closed within the required timeframes

Though these points will not work on every situation, or always minimize your losses, they are a start to procedures that should be in place for Regulation E disputes. As for taking back provisional credit, unfortunately once a final disposition letter is sent you cannot take the credit back in MOST cases. The only situation where it might be appropriate to take credit back is if the merchant also issued credit to the account holder after the Final Disposition letter is sent. If this situation arises, be sure to send a follow-up notification to the account holder to clearly tell him/her why you are reversing the credit.

Craving More Info? We've Got Your Back!

Want more Regulation E Training? Check out our EFT Disputes and Resolutions webinar recording for information and ideas to help you manage your dispute process! The recording is available now through December 31.