Cardholder Disputes

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What are cardholder disputes?

Cardholder disputes are claims that a cardholder submits to challenge a debit card transaction. A dispute is submitted when the cardholder believes a charge is unauthorized, incorrect, or otherwise should be reversed (for example, fraud, duplicate posting, or non-receipt of merchandise). Disputes are governed by Reg E, which implements the Electronic Funds Transfer Act (EFTA). EFTA allows consumers to challenge electronic transaction errors involving unauthorized or incomplete cardholder transactions as outlined in the issuing bank’s cardholder agreement. Some disputes qualify as errors under Reg E; others do not receive the same protection. Regardless of Reg E eligibility, all cardholder disputes should be submitted to the card processor, which submits them to the respective card network.

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Treasury Prime’s role

Treasury Prime facilitates getting dispute information to the card network and relaying the outcome back to the program. Treasury Prime is not involved in any decision making about disputes; the bank and the card network determine eligibility, provisional credit, and resolution.

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Bank responsibilities

The bank sets policy, provides training, and retains regulatory accountability. The bank works with the program to ensure disputes are handled according to regulatory requirements and bank policies.

• Process and oversight — Bank shall establish a process to adjudicate and submit cardholder disputes through the processor and card networks when offering debit card products through program partners. Bank will work with the program to align on an intake process, including how disputes are submitted by the end customer.
• Reg E training — Conduct Reg E training with the program. Reg E applies only to individual (consumer) cardholders, not commercial customers. Clarify that the program may still be required to submit a dispute to the bank through Treasury Prime (and thus to the card processor) even when it is not Reg E eligible.
• Roles and cost — Agree with the program on roles, responsibilities, and the cost of submitting disputes. The bank is the issuing bank for the program’s card program.
• Reporting — Establish dispute reporting with the program and Treasury Prime so the bank can provide dispute data to regulators during exams.
• Templates and approvals — Approve dispute-related customer communications and templates used by the program.

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Program responsibilities

The program is the front door for cardholder disputes and operates the dispute workflow. The bank retains ultimate regulatory responsibility.

• Dispute intake and customer experience — Receive dispute submissions directly from end customers and collect all required details and documentation. Communicate clearly with customers throughout the dispute lifecycle and send dispute-related notifications using bank-approved templates.
• Provisional credit handling — When applicable, issue provisional credits for Reg E–eligible disputes. These are typically funded from the program’s loss reserve at the bank; confirm mechanics with the bank. Track dispute aging and outcomes so credits are finalized or reversed correctly; credits become permanent after 45 days if the dispute remains unresolved. Coordinate with Treasury Prime, the bank, and internal teams as needed.
• Customer communications and notifications — When sending customer communications, as agreed with the bank, send accurate, timely notifications for dispute receipt, provisional credit issuance or ineligibility, final resolution, and credit reversals. Use only bank-approved language and templates and provide customers access to documentation upon request. The program owns the day-to-day customer relationship; the bank owns regulatory accountability.
• Cost awareness — Understand the cost of submitting disputes to the network. Decide when to submit versus paying out low-dollar (de minimis) disputes—see Scenario 7. Align these decisions with bank policy.
• Reporting and regulatory support — Participate in dispute reporting with the bank and Treasury Prime. Provide dispute data as needed for regulatory exams, audits, and bank oversight. Maintain internal records that support traceability and compliance. Work with the bank partner to define dispute data requirements for compliance (what to collect, retention periods, and storage).

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How to submit a cardholder dispute

Cardholder disputes are submitted through the Submit a Debit Card Dispute form. Use the form to submit a claim for any charges on a card that the cardholder wants to dispute. Only one transaction can be submitted per form; submit a separate form for each disputed transaction. Form link: Submit a Debit Card Dispute

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Types of dispute

When selecting the type of dispute on the form, you can choose from options such as:

• Fraud — Unauthorized use of the card.
• Double Posting — Same transaction charged more than once.
• Merchandise was returned — Cardholder returned the item but was still charged.
• Merchandise not received — Cardholder did not receive the item.
• Merchandise damaged, defective, or not as described — Item received but not as expected.
• Cardholder was overcharged for the purchase — Amount charged exceeds the agreed or correct amount.
• Credit did not post to the cardholder’s account — Expected credit or refund was not applied.
• ATM Withdrawal Incorrect — Dispute related to an incorrect ATM withdrawal.
• Cancelled Membership or Services — Cardholder cancelled but was still charged.

Provide as much detail as possible in the Description field and fill in Merchant Name, Amount, and Transaction ID when available to speed up the investigation.

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Dispute notifications and provisional credit

A critical part of offering any card program is having a clear, consistent process for handling disputed transactions and communicating with cardholders. Provisional credit for Reg E–eligible claims is typically issued from the program’s loss reserve at the bank. The exact mechanics (e.g., which account, timing) should be discussed with the bank. After a Reg E–eligible dispute has aged more than 45 days, the provisional credit becomes final. If the dispute is later won with the network after that point, the program’s loss reserve account is credited. Below are example email communications for the most common cardholder dispute scenarios. If the bank has the program send these to end customers who have submitted a dispute, the bank can use and edit these templates as needed. Scenario 1: The dispute has been received by the program from the customer, and a provisional credit has been issued. After the program receives a dispute from the customer, it is usually necessary to provide a provisional credit to cover the amount of the disputed transaction. This letter notifies the customer that a provisional credit has been issued and sets expectations for the timeline to a final resolution.

Dear [Customer], Thank you for your recent submission of a cardholder dispute regarding [Merchant/Amount]. We are committed to resolving this dispute as efficiently as possible. However, some investigations may take up to 90 days. We have issued a provisional credit to your account in the amount of [$___], which represents the total amount of your dispute including any interest you may have lost if your account is an interest-bearing account. You will have full use of these funds during our investigation of your dispute. This provisional credit is a temporary credit until your dispute is resolved. To the extent that the dispute is resolved in your favor, the credit will become permanent. If we deny your claim for any reason, this provisional credit will be deducted from your account. You will be notified in this event. We may also request additional information from you. Therefore, please retain all documentation or materials related to the disputed item(s). If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 2: The dispute has been received by the program from the customer and is not eligible for a provisional credit. Not all disputes are eligible for a provisional credit. This letter notifies the customer that the dispute has been received, that no provisional credit applies, and sets expectations for the timeline to a final resolution.

Dear [Customer], Thank you for your recent submission of a cardholder dispute regarding [Merchant/Amount]. We are committed to resolving this dispute as efficiently as possible. However, some investigations may take up to 90 days. To the extent that the dispute is resolved in your favor, a credit will be issued to your account. We may also request additional information from you. Therefore, please retain all documentation or materials related to the disputed item(s). If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 3: Dispute has been resolved in favor of the merchant so the issued provisional credit must be reversed. Not all disputes are resolved in favor of the customer. This letter notifies the customer that the card network has resolved the dispute in favor of the merchant and that the provisional credit will be reversed.

Dear [Customer], Thank you for your recent submission of a cardholder dispute regarding [Merchant/Amount]. The investigation has been completed. We are sorry to inform you that your dispute claim has been denied. Based on our review, we are denying your dispute claim for the following reason:
[Reason for denying dispute] As a result, the provisional credit in the amount of [$___] given to you on [MM/DD/YYYY], is being reversed five business days from the date of this letter on [MM/DD/YYYY]. We will honor checks, drafts, or preauthorized transfers payable to third parties up to the amount of the debit from your account without charge to you as a result of an overdraft until that date. All documentation relied upon in making this decision are available for your review upon your request. If you have any further questions, please feel free to contact us at [Contact Information]. The provisional credit previously issued on [MM/DD/YYYY] for [$___] will be reversed on [today’s date + X business days] as a result of the network ruling in favor of the merchant. If you have any questions, we may be able to request the documents that the network relied upon in making its decision. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 4: Dispute has been resolved in favor of the merchant and a provisional credit was not issued. Not all disputes are resolved in favor of the customer. This letter notifies the customer that the card network has resolved the dispute in favor of the merchant when no provisional credit was originally issued.

Dear [Customer], Thank you for your recent submission of a cardholder dispute regarding [Merchant/Amount]. The investigation has been completed. We are sorry to inform you that your dispute claim has been denied. Based on our review, we are denying your dispute claim for the following reason:
[Reason for denying dispute] All documentation relied upon in making this decision are available for your review upon your request. If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 5: Dispute has been resolved in favor of the customer so the provisional credit will be made permanent. This letter notifies the customer that the card network has resolved the dispute in their favor and that the provisional credit will become permanent.

Dear [Customer], Thank you for your recent submission of a cardholder dispute regarding [Merchant/Amount]. The investigation has been completed. We are happy to inform you that the dispute was resolved in your favor. As such, the provisional credit previously issued on [MM/DD/YYYY] for [$___] will become permanent. If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 6: The dispute has been resolved in favor of the customer and a provisional credit was not issued. This letter notifies the customer that the card network has resolved the dispute in their favor when no provisional credit was issued, but a final credit is being issued.

Dear [Customer], Your recent submission of a cardholder dispute regarding [Merchant/Amount] in the amount of [$___] has been completed. We are happy to inform you that the dispute was resolved in your favor. As such, we have credited your account for [$___]. If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]

Scenario 7: The dispute is de minimis so the program has opted to pay out the low-dollar dispute rather than submit it to the network. Submission of disputes to the card network has a fixed cost per dispute. When customers submit disputes for transactions of a lower dollar value than that cost, it can be financially prudent to issue a credit to the cardholder and absorb the cost. These are considered “de minimis” disputes. This letter notifies the customer that a credit has been issued and that the dispute has been resolved in their favor.

Dear [Customer], Your recent submission of a cardholder dispute regarding [Merchant/Amount] in the amount of [$___] has been completed. We are happy to inform you that the dispute was resolved in your favor. As such, we have credited your account for [$___]. If you have any further questions, please feel free to contact us at [Contact Information]. Thank you for being a valued customer.
Regards, [Fintech]