Customer Support and Complaints
    • 07 Dec 2023
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    Customer Support and Complaints

    • PDF

    Article summary

    Customer Support, Disputes, and Complaints

    Because you own the customer relationship, you are responsible as a first line to any interactions with your customer. This includes fielding requests on how your app works, technical issues, and customer complaints.

    • Your customer support policy or guide should describe your general process and tools for responding to your customers.
    • Your Sponsor Bank will be especially interested in how you interact with consumers (if applicable) as there are general guidelines and rules pertaining to consumer complaints and transaction disputes. This includes a responsibility of your Company to log customer complaints that you receive directly or through regulators such as the Federal Reserve or Consumer Financial Protection Bureau. Managing these complaints promptly and addressing any major themes that occur can protect you from reputation and legal risks.
    • It also includes ensuring that you follow the response timelines and have the ability to provide provisional credits to consumers according to Regulation E, which addresses consumer disputes on electronic transactions such as debit card and ACH transactions. In addition, there are cases where fraudsters may file disputes and having trained experts manage the responses can help mitigate fraud losses or excessive issuance of provisional credit by the Company.

    Reg E Disputes

    Customers can dispute transactions for many reasons ranging from not recognizing the transaction to fraudulent transactions by an unauthorized user. The most common reasons for disputes are as follows:

    • Amount discrepancy
    • Duplicate/Unauthorized transaction
    • Victim of fraud, card theft, or identity theft
    • Returned merchandise (generally not covered by Reg E)
    • Product/Service not as described or not received (generally not covered by Reg E)
    Reg E Disputes

    Reg E outlines rules for electronic funds transfers between consumers and financial institutions. This covers transfers made through ATMs, point-of-sale transactions, and ACH systems.

    It was created by the U.S. Federal Reserve to enforce the Electronic Funds Transfers Act, which was passed in 1978 by the U.S. Congress to safeguard consumers participating in financial transactions like these.

    Reg E disputes have specific timelines and steps that must be followed. Only certain types of disputes are considered Reg E disputes and the regulation only covers consumer disputes.

    Reg E vs. Standard Complaints

    At first glance, Reg E disputes can seem very similar to standard complaints. They differ in some fundamental ways in terms of scope and how they are resolved however:

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    Reg E dispute requirements

    Under Reg E, consumers are entitled to receive provisional credit and financial institutions are not allowed to demand excessive requirements from them. The customer is only required to provide the following information:

    • Merchant name
    • Transaction Amount
    • Transaction Date
    • Error Description

    Initial customer contact (ICC) is the date the customer has reported the error, which triggers the dispute timeframes. Below are the guidelines for a date to be considered an ICC:

    • Transaction Identifying Information has been provided
    • Mention of Dispute Reason
    • At least one (1) settled transaction

    CFPB Complaints Database

    The CFPB Complaints Database is a publicly available database where companies can view and sort through complaints on financial companies and fintechs. This can be a useful way to see the types of complaints that may be emerging in your product type or industry. It also gives you a sense of what the CFPB may be tracking and what your Sponsor Bank partner will be focused on. Note that consumers can also directly make complaints about your Company via the CFPB so it is important that as part of complaint tracking, there is ongoing search of CFPB to check if there are any complaints about your business.


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