A conditional credit is a temporary deposit your bank places in your account while it investigates a transaction you’ve disputed. It gives you access to the contested money right away instead of making you wait out the investigation. If the bank confirms the error, the credit stays. If the bank finds no error, it takes the money back. The rules for when a bank must post one, how long it can sit there, and what has to happen before it disappears come from a federal regulation called Regulation E.
When Your Bank Has to Post One
Regulation E gives your bank 10 business days to finish investigating a disputed electronic fund transfer after you report it. If the bank can’t finish in that window, it has a choice: close the case, or keep investigating. To keep investigating, it has to provisionally credit your account for the full disputed amount, plus any interest that would have accrued. That provisional credit is what shows up on your statement as a conditional credit. Without it, the bank has no right to extend the investigation past the initial 10 days.1eCFR. 12 CFR 1005.11 – Procedures for Resolving Errors
To trigger this process, you have to notify the bank of the error within 60 days of the statement that first shows it. Your notice needs your name, account number, and enough detail for the bank to understand what you think went wrong, including the date and amount if you have them. The bank can take your report by phone but may require you to follow up in writing within 10 business days.2Consumer Financial Protection Bureau. 12 CFR 1005.11 – Procedures for Resolving Errors
How Long the Credit Stays Provisional
The word “conditional” matters. The money sits in your account, but it isn’t yours yet. It stays provisional until the bank finishes investigating, and the outside deadline for that depends on the kind of transaction you disputed.
- Standard domestic electronic transfers, such as ACH or ATM transactions: 45 days from when the bank received your notice. Provisional credit posts within 10 business days.
- Point-of-sale debit card transactions, including mail and phone orders: 90 days. Provisional credit posts within 20 business days.
- Foreign transactions: 90 days, with the same 20-business-day credit window.
- Errors on new accounts, meaning the error happened within 30 days of your first deposit: 90 days, with the same 20-business-day credit window.
The point-of-sale category covers most debit card fraud. If someone uses your card number at a gas pump or an online retailer, your bank has up to 90 days to investigate, not 45.2Consumer Financial Protection Bureau. 12 CFR 1005.11 – Procedures for Resolving Errors
During those weeks, you can spend the credited money the same as any other funds. Just keep in mind that if the investigation ends against you, the bank will pull it back.
If the Bank Confirms the Error
When the investigation resolves in your favor, the conditional credit becomes permanent and the case closes. You don’t need to sign anything or take further action. The provisional deposit already in your account simply loses the “provisional” label.
If the Bank Finds No Error
If the bank decides no error occurred, it reverses the conditional credit by debiting your account for the same amount. Before it does, it has to tell you the date and amount of the reversal in writing, along with an explanation of why it denied your claim. That notice must also inform you that you can request copies of the documents the bank relied on during its investigation.1eCFR. 12 CFR 1005.11 – Procedures for Resolving Errors
There’s a built-in cushion around the reversal. For five business days after that notification, the bank has to honor checks, preauthorized payments, and similar transfers from your account without charging overdraft fees, even if pulling the conditional credit would otherwise leave you short. The five-day buffer exists so that losing the credit doesn’t set off a chain of bounced payments.1eCFR. 12 CFR 1005.11 – Procedures for Resolving Errors
A denial isn’t the end of the road. Request the investigation documents first. Banks sometimes deny claims on incomplete evidence or boilerplate reasoning, and reviewing the file shows whether the bank actually investigated or just accepted the merchant’s response. If you think the bank mishandled your dispute or missed a deadline, you can file a complaint with the Consumer Financial Protection Bureau at consumerfinance.gov/complaint. In 2024, companies responded to 99.7% of complaints and about 49% resulted in some form of relief for the consumer.3Consumer Financial Protection Bureau. Submit a Complaint About a Financial Product or Service
Small claims court is another route when the dollar amount is modest. Filing fees generally run from about $30 to $75 and you usually don’t need a lawyer. Check your deposit agreement first, though. Many large banks include mandatory arbitration clauses that require you to resolve disputes through private arbitration rather than court.
Credit Cards Work Differently
If you’re looking at a credit card statement rather than a checking account, the conditional-credit mechanism doesn’t apply the same way. Credit card billing disputes are governed by Regulation Z, which does not require your card issuer to post a provisional credit at all. Instead, the protection takes a different form: while the investigation is open, the issuer cannot try to collect the disputed amount, cannot report you as delinquent for not paying it, and cannot close your account or accelerate your debt because you disputed. You can withhold payment on the disputed portion without penalty.4eCFR. 12 CFR 1026.13 – Billing Error Resolution
Many issuers do post a temporary credit anyway as a matter of customer service, and that credit behaves much like a bank’s conditional credit: it stays if the issuer confirms the error and reverses if it doesn’t. But the law doesn’t force them to. Regulation Z requires the issuer to acknowledge your written notice within 30 days and to resolve the matter within two complete billing cycles, capped at 90 days from receiving your notice.5Consumer Financial Protection Bureau. 12 CFR 1026.13 – Billing Error Resolution
Payments That Carry No Right to a Conditional Credit
The conditional-credit process is a Regulation E feature, and Regulation E doesn’t cover every electronic payment. A few common payment types sit outside it, which means you have no federal right to a provisional deposit or a structured investigation timeline if something goes wrong.
Wire transfers are explicitly excluded from Regulation E’s definition of electronic fund transfers. If you wire money and later discover fraud, recovery depends on contacting your bank immediately and hoping the receiving bank can freeze the funds, which rarely works once more than a few hours have passed.
Peer-to-peer payments through apps like Zelle and Venmo sit in a gray area. Regulation E protects you when someone initiates a transfer from your account without your permission. But if a scammer tricks you into sending money yourself, the transfer counts as authorized because you were the one who tapped send. Most P2P services do not reimburse authorized payments. Some banks have started offering limited reimbursement for certain imposter scams involving Zelle, but those programs are voluntary and can change at any time.
Cryptocurrency transactions and purchases made with prepaid gift cards also fall outside Regulation E. When a scammer insists on payment in gift cards or crypto, that’s a deliberate choice on their part to use payment methods with no reversal mechanism and no conditional credit waiting on the other side.