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Q.) We have an account holder who is claiming unauthorized ACH transactions that posted to their account over 6months ago. He was recently released from jail and did not have access to his bank statements while incarcerated. Would this be considered extenuating circumstances in regards to making a Reg E claim? If so, how would this impact his liability for the transactions?
A.) Consumer protections under Regulation E do not cease under any circumstance. As the RDFI, upon receipt of notice from your consumer account holder, you must still conduct your investigation and follow Reg E procedures. The timeframes for unauthorized transactions relate to obtaining a signed WSUD and returning the transaction(s) via the ACH. To determine what the Financial Institution would deem extenuating circumstances, and the account holder’s liability to provide timely notice, the first step would be to refer back to the disclosures that are provided at the time of account opening as well as your procedures.
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