Which of the following actions is prohibited by a credit union while handling a billing error claim from a member under Reg Z?

In the context of Regulation Z, which implements the Truth in Lending Act (TILA), the handling of billing error claims is governed by specific protocols to protect consumers. When a member formally disputes a charge on their account, it is critical for the credit union to comply with the regulatory requirements.

Collecting the amount of the disputed charge during the investigation of a billing error claim is prohibited. This is because Regulation Z establishes that, once a dispute is raised, the creditor must acknowledge the claim and refrain from collecting the disputed amount until the investigation is completed. This rule ensures that consumers are not pressured to pay charges that they believe are erroneous while the credit union is still in the process of determining the validity of the claim.

By allowing members to dispute charges without immediate financial repercussion, Regulation Z fosters a fair and transparent environment that protects consumers during billing disputes. Other actions such as acknowledging receipt of the claim, investigating the claim, and providing information on dispute resolution are all compliant with Regulation Z and serve to maintain a communicative and supportive relationship between the credit union and its members during the dispute process.