What should an institution do upon receiving a notification of a disputed transaction?

When an institution receives a notification of a disputed transaction, the appropriate course of action is to investigate and respond. This is vital as it ensures the proper handling of the dispute in accordance with regulations and internal policies.

Investigating the matter allows the institution to gather relevant information, review transaction details, and assess whether the dispute is valid based on the evidence available. It is not just a procedural obligation; it is also crucial for maintaining customer trust and compliance with regulatory requirements, such as those set forth by the NACHA rules for ACH transactions.

Responding effectively means that the institution communicates with the customer, providing them with the outcome of the investigation or additional steps that may need to be taken. This interaction is key to resolving the dispute in a timely manner and ensuring the customer feels heard and valued.

In contrast, ignoring the notification would not only lead to dissatisfaction for the customer but could also result in violations of regulations and potential financial penalties. Reporting it immediately may not be necessary if the standard procedure requires an investigation first. Filing a claim would typically follow a thorough investigation if it is determined that a claim is warranted.