Q: What are a financial institution’s error resolution obligations under Regulation E?
A: In general, Regulation E requires that after a financial institution receives oral or written notice of an error from a consumer, the financial institution must do all of the following:
- Promptly investigate the oral or written allegation of error.
- Complete its investigation within the time limits specified in Regulation E.
- Report the results of its investigation within three business days after completing its investigation.
- Correct the error within one business day after determining that an error has occurred.
12 CFR 1005.11(c)(1).
The investigation must be reasonable, including a reasonable review of relevant information within the financial institution’s own records. 2019-BCFP-0001
. The Bureau found that a financial institution did not conduct a reasonable investigation when it summarily denied error disputes if consumers had prior transactions with the same merchant, and the financial institution did not consider other relevant information such as the consumer’s assertion that the EFT was unauthorized or for an incorrect amount. 2019-BCFP-0001
. If the error is an unauthorized EFT, certain consumer liability limits apply. 12 CFR 1005.6.