[Angie Cowell]

We need assistance in understanding Reg E requirements in regards to resolving errors when the customer notifies us more than 60 days since appearing on the statement.

Question #1- We interpret the Commentary to 1005.11 (b)(1)(7) to mean that if it is beyond 60 days from the date on which the statement first reflected the error and the customer is just now notifying us, that we do not have to investigate or provide any credit and the customer is liable. However, if it is an unauthorized EFT then we need to proceed to 1005.6. I have pasted 1005.11(b)(1)(7). Are we interpreting this correctly?

1005.11(b)(1)(7)
7. Effect of late notice. An institution is not required to comply with the requirements of this section for any notice of error from the consumer that is received by the institution later than 60 days from the date on which the periodic statement first reflecting the error is sent. Where the consumer’s assertion of error involves an unauthorized EFT, however, the institution must comply with § 1005.6 before it may impose any liability on the consumer.

Question #2 We are not clear on whether or not we have to provide provisional credit, if we need to the required time frames, and understanding how the customer’s liability. For example, an unauthorized transfer occurred on the April statement of $100.00 and subsequently every month since. The statement cuts the last day of the month. The customer notified us in August. Do we need to provide any provisional credit, if so for what months? What is the customer’s liability? I am attaching 1005.6 (b)(3)below.

Thank you for your assistance.

1005.6(b)(3)
(3) Periodic statement; timely notice not given. A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution’s transmittal of the statement to avoid liability for subsequent transfers. If the consumer fails to do so, the consumer’s liability shall not exceed the amount of the unauthorized transfers that occur after the close of the 60 days and before notice to the institution, and that the institution establishes would not have occurred had the consumer notified the institution within the 60-day period. When an access device is involved in the unauthorized transfer, the consumer may be liable for other amounts set forth in paragraphs (b)(1) or (b)(2) of this section, as applicable.

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