Regulation E and Written Confirmation of Error

Issue/Inquiry

When a customer notifies the Bank of an electronic funds transfer error, the Bank requires a written confirmation of the notice. If the customer does not provide such, does the Bank need to start the investigation?

Response Summary

Regulation E requires a financial institution to investigate an electronic funds transfer error, whether the notification is oral or in writing. If the institution requires written confirmation and the consumer does not provide it, the institution will not be required to provisionally credit the consumer’s account before taking more than 10 business days to investigate the error.

Response Detail

The Bank would indeed need to begin an investigation even though the consumer had not provided a written notice of error.

A financial institution must comply with the error resolution requirements of Regulation E with respect to any oral or written notice of error from the consumer that:

• Is received by the institution no later than 60 days after the institution sends the periodic statement or provides the passbook documentation on which the alleged error is first reflected;
• Enables the institution to identify the consumer’s name and account number; and
• Indicates why the consumer believes an error exists and includes, to the extent possible, the type, date, and amount of the error. 12 CFR §1005.11(b)(1).

Regulation E does not distinguish between oral and written requests as far as the Bank’s obligation to investigate an error is concerned. If the Bank receives a notice of error that provides it with the required information, the Bank must investigate, whether the notice is provided verbally or in writing and whether or not the consumer provides the written confirmation required by the Bank.

The written notice of error is important when more than 10 business days are required to complete the investigation. If the Bank requires written confirmation and the consumer does not provide such, the Bank will not be required to provide provisional credit of the amount in dispute before taking more than 10 business days to complete the investigation. 12 CFR §1005.11(c)(2)(i)(A).

This entry was posted on Wednesday, January 2nd, 2019 at 6:00 am.