Checking Statements and Dispute Requirements

Karen Sylvester

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

If account holders do not check their statements in a timely manner, do you have to accept their disputes for unauthorized transactions?

The answer, quite simply, is YES! Sometimes it would be nice to scream it through the rooftops to check your statements. Financial institutions have even made it easier to do so by offering electronic banking to check accounts, yet account holders are so inundated with technology, it often slips their mind until there is an issue.

According to Regulation E, Section 1005.6 (b) 3, consumers can limit their liability by notifying the financial institution of an unauthorized transaction(s) within 60 days of receiving their statement. However, this section does not allow a financial institution to no longer accept those disputes after the 60 days. A fine was imposed against USAA by the Consumer Financial Protection Bureau earlier this year for failing to initiate and complete reasonable error resolution investigations.

If account holders notify you of errors on their statement, you must accept the disputes. The one thing financial institutions are not required to do if notification is received after 60 days from the statement date is provide provisional credit during the investigation process. The financial institution may also be responsible for the first transaction and any subsequent transactions during that 60 days from the statement date, but the account holder would be liable for any recurring additional transactions beyond the 60 days that could have been prevented if the account holder had given timely notice.

The one takeaway from the USAA fines is that no account holder should be denied the ability to dispute a transaction, even if it is beyond the 60 days.

Need a Refresher on Your Responsibilities?

Do you have some “what if” questions floating around in your head? We’ll be diving deeper into this topic in an upcoming webinar. Watch for details for our Disputes Beyond the 60th Day webinar on March 28th to learn more about your responsibilities regarding disputes and let us help make this tricky topic clear.