IBA Compliance Connection

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Master Card requires written confirmation signed by the card holder when disputing an unauthorized transaction. If the customer refuses to provide written confirmation of an unauthorized debit (via fax, e-mail, standard mail, or coming into the bank), how do we proceed to file a claim with Master Card? I understand that we do not have to give provisional credit without proper forms signed, but after the 45-day investigation what would be the proper procedure?

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It is difficult to reconcile Regulation E with credit card company policies because they do not always align. In this case, regardless of Master Card’s policy, Regulation E requires that you investigate the disputed charge. Procedurally, after your 45-day investigation period, you must notify the customer of the results of your investigation and correct the error (if any), including the crediting of interest where applicable. You will have to contact Master Card to determine how to file a claim with them without the written confirmation of the card holder required under their policy.

For resources related to our guidance, please see:

  • Regulation E 12 CFR 1005.11(c)(2) (If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred.)
  •  Regulation E 12 CFR 1005.11(c)(2)(i) (An institution need not provisionally credit the consumer's account if the institution requires but does not receive written confirmation within 10 business days of an oral notice of error.)
  • Regulation E 12 CFR 1005.11(c)(2)(iii), (iv) (A bank can take 45 days to investigate an error if it corrects the error, if any, within one business day after determining that an error occurred and reports the results to the consumer within three business days after completing its investigation.)