Debit Card Disputes
The Electronic Fund Transfer Act, 15 U.S.C § 1693, among other things, provides the mechanism for debit card holders to dispute errors on their account.
What is a Billing Error:
→ An unauthorized electronic fund transfer,
→ An incorrect electronic fund transfer from or to the consumer’s account,
→ The omission from a periodic statement of an electronic fund transfer affecting the consumer’s account which should have been included,
→ A computational error by the financial institution,
→ The consumer’s receipt of an incorrect amount of money from an electronic terminal,
→ A consumer’s request for additional information or clarification concerning an electronic fund transfer or any required documentation, or
→ Any other error described in the Regulations.
Time to Dispute: A consumer may dispute, either orally or in writing, errors on his or her account within 60 days of the documentation of such error having been transmitted to the consumer. In making the dispute, you should provide your name, account number, the disputed dollar amount, the date the error occurred, and indicate your belief that there is an error and an explanation for why you believe there is an error. If you make the dispute orally, the financial institution, within ten days of your dispute, may request and require that you provide it with written confirmation of the dispute.
Financial Institution’s Responsibility Upon Receipt of Dispute:
The financial institution shall investigate the alleged error, determine whether an error has occurred, and report or mail the results of its investigation and determination to you within 10 business days
The financial institution, within 10 days of receiving notice of the dispute, can provisionally recredit your account for the amount of the alleged error, including interest where applicable, pending the conclusion of its investigation of the dispute. If the financial institution chooses this option, it has 45 days to conclude its investigation of the dispute. While the dispute is pending, you should have full use of the funds provisionally credited.
If No Error is Found By The Financial Insititution:
If after a good faith investigation, the financial institution concludes there is no error, it shall, within 3 business days, send you: 1) an explanation of its findings; and 2) a notice of the your right to request copies of the documents the financial institution relied on to reach its conclusion.
The Electronic Fund Transfer Act permits consumers to recover damages, attorneys fees, costs, and even treble damages where:
- a financial institution’s failure to provisionally recredit the consumer’s account if it fails to conclude its investigation within 10 days of receipt of the notice of dispute, when it did not make a good faith investigation of the error or did not have a reasonable basis for believing that the consumer’s account was not in error, or
- the financial institution knowingly and willingly concluded that the consumer’s account was not in error when such conclusion could not have reasonably been drawn from the evidence available to the financial institution at the time of its investigation.