[Gholloway]

Does Regulation E require the notification of provisional credit to consumers be in writing? Can we notify them by telephone when they file the dispute of when they can expect to receive provisional credit? We provide provisional credit to all consumer disputes on day two after the dispute is called in or reported…

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[rcooper]

Regulation E, 1005.11(c)(2), state:

Forty-five day period. 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, provided the institution does the following:

(i) Provisionally credits the consumer’s account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. If the financial institution has a reasonable basis for believing that an unauthorized electronic fund transfer has occurred and the institution has satisfied the requirements of § 1005.6(a), the institution may withhold a maximum of $50 from the amount credited. An institution need not provisionally credit the consumer’s account if:
(A) The institution requires but does not receive written confirmation within 10 business days of an oral notice of error; or

(B) The alleged error involves an account that is subject to Regulation T of the Board of Governors of the Federal Reserve System (Securities Credit by Brokers and Dealers, 12 CFR part 220); or,

(C) The alleged error involves a prepaid account, other than a payroll card account or government benefit account, for which the financial institution has not completed its consumer identification and verification process, as set forth in § 1005.18(e)(3)(ii).

(ii) Informs the consumer, within two business days after the provisional crediting, of the amount and date of the provisional crediting and gives the consumer full use of the funds during the investigation;…

It does not specify that the notice must be in writing, therefore, it can be either oral or written. However, to ensure clear communication with customers and to document compliance, many banks have implemented procedures that require their notification to be given in writing.

[Author]

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