(a) Circumstances giving rise to a claim. A consumer may make a
claim under this section for a recredit with respect to a substitute
check if the consumer asserts in good faith that—
(1) the bank holding the consumer’s account
charged that account for a substitute check that was provided to the
consumer (although the consumer need not be in possession of that
substitute check at the time he or she submits a claim);
(2) the substitute check was
not properly charged to the consumer account or the consumer has a
warranty claim with respect to the substitute check;
(3) the consumer suffered a resulting loss;
and
(4) production of
the original check or a sufficient copy is necessary to determine
whether or not the substitute check in fact was improperly charged
or whether the consumer’s warranty claim is valid.
9-576.1
(b) Procedures for making claims. A
consumer shall make his or her claim for a recredit under this section
with the bank that holds the consumer’s account in accordance with
the timing, content, and form requirements of this section.
(1) Timing of
claim.
(i) The consumer shall submit his or
her claim such that the bank receives the claim by the end of the
40th calendar day after the later of the calendar day on which the
bank mailed or delivered, by a means agreed to by the consumer—
(A) the periodic account statement that contains information concerning
the transaction giving rise to the claim; or
(B) the substitute check giving rise to the
claim.
(ii) If the consumer cannot submit his or her claim by the time specified
in paragraph (b)(1)(i) of this section because of extenuating circumstances,
the bank shall extend the 40-calendar-day period by an additional
reasonable amount of time.
(iii) If a consumer makes a claim orally
and the bank requires the claim to be in writing, the consumer’s claim
is timely if the oral claim was received within the time described
in paragraphs (b)(1)(i)-(ii) of this section and the written claim
was received within the time described in paragraph (b)(3)(ii) of
this section.
(2) Content of claim.
(i) The
consumer’s claim shall include the following information:
(A) a description
of the consumer’s claim, including the reason why the consumer believes
his or her account was improperly charged for the substitute check
or the nature of his or her warranty claim with respect to such check;
(B) a statement that the
consumer suffered a loss and an estimate of the amount of that loss;
(C) the reason why production
of the original check or a sufficient copy is necessary to determine
whether or not the charge to the consumer’s account was proper or
the consumer’s warranty claim is valid; and
(D) sufficient information to allow the bank
to identify the substitute check and investigate the claim.
(ii) If a consumer attempts
to make a claim but fails to provide all the information in paragraph
(b)(2)(i) of this section that is required to constitute a claim,
the bank shall inform the consumer that the claim is not complete
and identify the information that is missing.
(3) Form and submission of claim; computation of time for bank action. The bank holding the account that is the subject of the consumer’s
claim may, in its discretion, require the consumer to submit the information
required by this section in writing. A bank that requires a written
submission—
(i) may permit the consumer to submit
the written claim electronically;
(ii) shall inform a consumer who submits
a claim orally of the written-claim requirement at the time of the
oral claim and may require such consumer to submit the written claim
such that the bank receives the written claim by the 10th business
day after the banking day on which the bank received the oral claim;
and
(iii) shall compute
the time periods for acting on the consumer’s claim described in paragraph
(c) of this section from the date on which the bank received the written
claim.
9-576.2
(c) Action on claims. A bank that receives
a claim that meets the requirements of paragraph (b) of this section
shall act as follows:
(1) Valid consumer
claim. If the bank determines that the consumer’s claim is valid,
the bank shall—
(i) recredit the consumer’s account
for the amount of the consumer’s loss, up to the amount of the substitute
check, plus interest if the account is an interest-bearing account,
no later than the end of the business day after the banking day on
which the bank makes that determination; and
(ii) send to the consumer the notice
required by paragraph (e)(1) of this section.
(2) Invalid consumer claim. If a bank determines that the consumer’s
claim is not valid, the bank shall send to the consumer the notice
described in paragraph (e)(2) of this section.
(3) Recredit
pending investigation. If the bank has not taken an action described
in paragraph (c)(1) or (c)(2) of this section before the end of the
10th business day after the banking day on which the bank received
the claim, the bank shall—
(i) by the end of that business day—
(A) recredit the consumer’s account for the amount of the consumer’s
loss, up to the lesser of the amount of the substitute check or $2,500,
plus interest on that amount if the account is an interest-bearing
account; and
(B) send
to the consumer the notice required by paragraph (e)(1) of this section;
and
(ii) recredit the consumer’s account for the remaining amount of
the consumer’s loss, if any, up to the amount of the substitute check,
plus interest if the account is an interest-bearing account, no later
than the end of the 45th calendar day after the banking day on which
the bank received the claim and send to the consumer the notice required
by paragraph (e)(1) of this section, unless the bank prior to that
time has determined that the consumer’s claim is or is not valid in
accordance with paragraph (c)(1) or (c)(2) of this section.
(4) Reversal of recredit. A bank may reverse
a recredit that it has made to a consumer account under paragraph
(c)(1) or (c)(3) of this section, plus interest that the bank has
paid, if any, on that amount, if the bank—
(i) determines that
the consumer’s claim was not valid; and
(ii) notifies the consumer in accordance
with paragraph (e)(3) of this section.
9-576.3
(d) Availability of recredit.
(1) Next-day availability. Except as provided in paragraph (d)(2)
of this section, a bank shall make any amount that it recredits to
a consumer account under this section available for withdrawal no
later than the start of the business day after the banking day on
which the bank provides the recredit.
(2) Safeguard
exceptions. A bank may delay availability to a consumer of a
recredit provided under paragraph (c)(3)(i) of this section until
the start of the earlier of the business day after the banking day
on which the bank determines the consumer’s claim is valid or the
45th calendar day after the banking day on which the bank received
the oral or written claim, as required by paragraph (b) of this section,
if—
(i) the consumer submits the claim during
the 30-calendar-day period beginning on the banking day on which the
consumer account was established;
(ii) without regard to the charge that
gave rise to the recredit claim—
(A) on six or more business days
during the six-month period ending on the calendar day on which the
consumer submitted the claim, the balance in the consumer account
was negative or would have become negative if checks or other charges
to the account had been paid; or
(B) on two or more business days during such
six-month period, the balance in the consumer account was negative
or would have become negative in the amount of $5,000 or more if checks
or other charges to the account had been paid; or
(iii) the bank has reasonable
cause to believe that the claim is fraudulent, based on facts that
would cause a well-grounded belief in the mind of a reasonable person
that the claim is fraudulent. The fact that the check in question
or the consumer is of a particular class may not be the basis for
invoking this exception.
(3) Overdraft
fees. A bank that delays availability as permitted in paragraph
(d)(2) of this section may not impose an overdraft fee with respect
to drafts drawn by the consumer on such recredited funds until the
fifth calendar day after the calendar day on which the bank sent the
notice required by paragraph (e)(1) of this section.
9-576.4
(e) Notices relating to consumer
expedited-recredit claims.
(1) Notice of
recredit. A bank that recredits a consumer account under paragraph
(c) of this section shall send notice to the consumer of the recredit
no later than the business day after the banking day on which the
bank recredits the consumer account. This notice shall describe—
(i) the amount of the recredit; and
(ii) the date on which the recredited
funds will be available for withdrawal.
(2) Notice that
the consumer’s claim is not valid. If a bank determines that
a substitute check for which a consumer made a claim under this section
was in fact properly charged to the consumer account or that the consumer’s
warranty claim for that substitute check was not valid, the bank shall
send notice to the consumer no later than the business day after the
banking day on which the bank makes that determination. This notice
shall—
(i) include the original check or a
sufficient copy, except as provided in section 229.58;
(ii) demonstrate to the
consumer that the substitute check was properly charged or the consumer’s
warranty claim is not valid; and
(iii) include the information or documents
(in addition to the original check or sufficient copy), if any, on
which the bank relied in making its determination or a statement that
the consumer may request copies of such information or documents.
(3) Notice of a reversal of recredit. A bank
that reverses an amount it previously recredited to a consumer account
shall send notice to the consumer no later than the business day after
the banking day on which the bank made the reversal. This notice shall
include the information listed in paragraph (e)(2) of this section
and also describe—
(i) the amount of the reversal, including
both the amount of the recredit (including the interest component,
if any) and the amount of interest paid on the recredited amount,
if any, being reversed; and
(ii) the date on which the bank made
the reversal.
(f) Other claims not affected. Providing a
recredit in accordance with this section shall not absolve the bank
from liability for a claim made under any other provision of law,
such as a claim for wrongful dishonor of a check under the UCC, or
from liability for additional damages, such as damages under section
229.53 or section 229.56 of this subpart or UCC 4-402.
