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Should the bank follow the Regulation E dispute process and timeframes for all online bill-payments?

My bank has a question about consumer disputes concerning online bill payment. There is disagreement about whether Regulation E (Electronic Funds Transfer Act) covers such disputes, particularly in instances where the bill-pay vendor generates a check or draft instead of sending an electronic payment. Should the bank follow the Regulation E dispute process and timeframes for all online bill-payments?

Generally, yes. Regulation E and its dispute provisions cover payments made through on-line bill-payment services, even if those payments will actually be paid by check unless “the terms of the bill-payment service explicitly state that all payments, or all payments to a particular payee or payees, will be solely by check, drafts, or similar paper instrument … and the payee or payees that will be paid in this manner are identified to the consumer.” (See comment 1vi to § 1005.3(b)(1)). (July 2019)

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