Found an error on your bank statement? Then do you realize that too much time has passed to have it easily corrected? You’re not alone. This common issue brings us to an important aspect of financial regulations: Regulation E (12 CFR 1005.11).
What is Regulation E?
Regulation E is part of the Electronic Fund Transfer Act (EFTA) and is designed to protect consumers who use electronic fund transfer services. These services include ATM transfers, point-of-sale transactions, direct deposits, and more. One key component of Regulation E is the error resolution procedure. This procedure ensures that consumers can dispute errors in their accounts in a timely manner.
The 60-Day Rule
Regulation E stipulates that consumers must notify their financial institution of any errors within 60 days of receiving the periodic statement that shows the error. If this notification is not made within the 60-day window, the financial institution is not obligated to comply with the error resolution procedures.
What Constitutes a Proper Notice of Error?
To be considered valid, the notice of error must include:
– The consumer’s name and account number
– A description of why the consumer believes there is an error
– The type, date, and amount of the error, if possible
Once a financial institution receives this notice, they are required to:
- Investigate the Error: Within 10 business days.
- Report the Results: To the consumer within three business days after completing the investigation.
- Correct the Error: Within one business day if an error is found.
What Happens If You Miss the 60-Day Window?
If the notification is not made within the 60-day time-frame, the bank is not required to follow the error resolution procedures. This means they do not have to investigate or correct the error. However, the consumer may still be responsible for any unauthorized transactions that occur.
An example of this can be seen in a response from a financial institution to a client requesting a correction: “This is past the 60 day mark for making corrections with tagging payments to assets. The client will have to do an asset valuation to get the correct amount.”
In such cases, the consumer may need to take additional steps, such as conducting an asset valuation, to determine the correct amount.
Steps to Take If You Miss the 60-Day Deadline
- Conduct an Asset Valuation: This helps in determining the correct amount that should have been reflected in your account.
- Contact Your Financial Institution: While they are not obligated to comply with the error resolution procedure, it is still worth discussing your situation with them. They may offer alternative solutions or assistance.
3. Monitor Your Accounts Closely: To avoid similar issues in the future, regularly review your account statements and report any discrepancies immediately.
Preventing Future Issues
To prevent missing the 60-day window in the future:
– Set reminders to review your statements as soon as they are available.
– Utilize online banking tools to monitor your account activity regularly.
– Immediately report any discrepancies or unauthorized transactions to your financial institution.
Regulation E is in place to protect consumers, but it also relies on consumers to be vigilant and proactive in monitoring their accounts. Understanding the rules and taking timely action can save you from the frustration and complications of dealing with unresolved account errors.
uDirect IRA Services provides a monthly statement in PDF form within the online portal. Make a practice of downloading that statement each month and saving it to your computer. Go through the statement to make sure all postings are correct. If you find an issue, reach out to us immediately at info@uDirectIRA.com.
