What is provisional credit?

Provisional credit is a temporary credit provided by a financial institution to a customer whose account may have been subject to unauthorized transactions or errors. This credit is typically given while an investigation is being conducted to determine the validity of the customer's claim.

Provisional credit allows the customer to have access to the disputed funds while the financial institution investigates the dispute. It helps to protect the customer from potential financial hardship that may result from unauthorized transactions or errors.

Financial institutions have a set period of time to investigate the dispute, typically within 10 business days for electronic transfers (such as debit card transactions) and within 45 days for other types of transactions. If the investigation determines that the customer's claim is valid, the provisional credit may become permanent. However, if the investigation finds that the customer's claim is invalid, the provisional credit may be reversed.

It is important for customers to promptly report any unauthorized transactions or errors to their financial institution in order to receive provisional credit and begin the investigation process. Customers should also keep records of their transactions and communication with the financial institution throughout the investigation.