How Banks Should Correct Errors

When a bank makes a mistake on someone’s account statement it can create the potential for a major issue. Even something as small as a minor and temporary glitch that’s fixed quickly can turn into many disgruntled customers. Issues with glitches and duplicate charges showing up on bank accounts are rare, but are still impactful, especially among growingly irate customers who want to make sure they’re not being taken advantage of.

When something like this happens, it’s important that the bank in question resolves it quickly and responsibly, then follows up with solutions and information as to what happened and how it’s being fixed moving forward. This can help keep the customers safe as well as banks when it comes to major legal claims.

Insurance to Protect Banks

Banks are not immune from legal matters being pressed against them, even if an error is fixed and nothing is lost or gained. Customers don’t want to experience any loss of integrity in their bank and don’t want to see transparency go out the window. This is why banks are apt to invest in bankers professional liability insurance, which can provide the protection a bank needs when claims are made.

A bankers professional liability insurance policy offers banks, as well as their executives and employees, coverage for any alleged errors or omissions in professional services offered to customers.

Bank Billing Errors and How to Respond

Most bank billing errors involve open-end credit, which is consumer credit that’s been extended by a bank. This is outlined by a bank reasonably expecting transactions or if they charge occasional fees or interest on an unpaid balance. The most common example of issues with open-end credit is a credit card.

A bank is legally bound to send out periodic statements to all customers who have credit cards or open-end credit. They need to pay special attention that mistakes aren’t made when these go out. Once a bank receives notice about a billing error, they must give the customer(s) a written acknowledgement within 30 days, unless it has finished the billing error procedures during that time period.

The error must be resolved within two billing cycles and no later than 90 days after receiving notice from customers. Banks are required to respond more quickly if an error is more crucial in nature and involves an unauthorized electronic transfer. If this is the case, banks must complete their own investigation of such issues within 10 business days of receiving an error notice and report any findings to the customer within three days while also issuing a final correction within 24 hours of determining what the error was.

About Financial Guaranty Insurance Brokers

Since 1983, Financial Guaranty Insurance Brokers has distinguished itself as a provider of Professional Liability, Cyber Liability, and Crime insurance products for entities of all types. To receive timely, personalized service from a knowledgeable and experienced staff, call us today at (626) 793-3330 to speak with one of our professionals.