We have a situation where our customer told us on June 11, 2009, that he had checks missing/stolen. He wanted to place a stop pay on both. When we looked at his history, we found that one of the checks had already cleared. It so happened that the person that stole the checks forged them and brought one in the previous day (June 10th), which was cashed for $100. The following day (June 12th) the customer stated that his daughter stole the checks. One of our employees told the customer that he needed to file a police report before we could reimburse him. He didn't want to do this since it was his daughter and said that he wanted the "claim" dropped (nothing in writing by us or him).

Today, he came back and said that he filed a police report because it actually was his daughters friend's mom that stole/forged/cashed his check. Too long of a story, but now he wants the $100 from us since he filed the police report.

We (the bank) know that we can't ask for a police report but only found this out when listening to the Reg E webinar from Andy (BOL). Do we have to pay this guy?

If you are talking about paper checks - Regulation E does not apply. It will revert to your depositor's contract and the UCC.

I'm embarrassed. I just had one of those "Duh" moments. We were stuck on Reg E because of the webinar and didn't think further than that.

Thanks rlcarey for your time. I might need to change my name after this one.

Police report or not, the UCC will drop this one squarely in your lap. Time to pay up, assuming that the signatures don't compare VERY closely.