We have a bank customer, husband, who is making a claim that numerous ACH transactions dating back to November are unauthorized. These transactions were made by his wife, and they were coming out of his checking account (wife is not an owner on his checking account).
We are not sure how to proceed. The "unauthorized" transactions were credit card payments. Many of these payments have the husband's name on them in the transaction.
The transactions from the first 60 days alone are over $30,000, so we really want to make sure we get this right. We would love to deny this claim, as it seems like a marital dispute and that the husband received benefit from the "unauthorized" transactions, but of course we don't know that for sure.

Since the claim was not made timely, your requirements under 1005.11 don't apply. This means that you do not have to provide provisional credit or complete your investigation in 45 days. However, as you are correctly implying, the liability schedule in 1005.6 still applies to the transactions that occur 60 days after the delivery of the statement on which the first unauthorized charge appeared. (Not 60 days from the date of the first unauthorized charge.)

So are the transactions legit or not?

If your investigation determines that his name is on the credit cards that were paid, you would have a strong argument to say that he received benefit from the transactions. The interpretations to Reg E provide some investigation options for you.

No EFT agreement. When there is no agreement between the institution and the third party for the type of EFT involved, the financial institution must review any relevant information within the institution's own records for the particular account to resolve the consumer's claim. The extent of the investigation required may vary depending on the facts and circumstances. However, a financial institution may not limit its investigation solely to the payment instructions where additional information within its own records pertaining to the particular account in question could help to resolve a consumer's claim. Information that may be reviewed as part of an investigation might include:

i. The ACH transaction records for the transfer;

ii. The transaction history of the particular account for a reasonable period of time immediately preceding the allegation of error;

iii. Whether the check number of the transaction in question is notably out-of-sequence;

iv. The location of either the transaction or the payee in question relative to the consumer's place of residence and habitual transaction area;

v. Information relative to the account in question within the control of the institution's third-party service providers if the financial institution reasonably believes that it may have records or other information that could be dispositive; or

vi. Any other information appropriate to resolve the claim.

You state that many, but not all have the husband's name on them. Can you determine from the ACH record that the payment's with the wife's name are to the same card(s)? That could provide additional documentation to substantiate denying all of the transactions.

The decision to pay or deny is ultimately up to your conclusions from your investigation. Given the large dollar amount involved, you may wish to confer with bank counsel as there is the risk of the bank being dragged into court to become a part of the divorce proceedings.

These types of dispute demonstrate how expensive Reg E has the potential to be. BOL Guru Andy Zavonia will be covering the claims process as part of his Reg E Webinar next month.

Thanks for your input, much appreciated!