A customer withdrew funds from an ATM at another bank. The customer retrieved the funds and quickly drove off before answering whether or not they wanted another transaction. The next customer in line at the ATM withdrew additional funds from the first customer's account. How should this be handled?

Apparently your customer has made a claim that the second withdrawal was unauthorized, and wants his money back. If the facts are as you have described them, I'd agree that the transaction was unauthorized, and your customer's failure to cancel out of his live session can't be used against him in how you proceed. It's not a lost or stolen card situation, so the customer gets his money back.

You said the ATM is at another bank. That bank is the party at fault in this scenario, if you need to point a finger. Allowing the possibility of a second transactions without a second PIN entry in a card "dip and remove" reader ATM is inviting trouble.

Allowing the possibility of a second transactions without a second PIN entry in a card "dip and remove" reader ATM is inviting trouble.

I have never seen or heard of one that allows this. Call the other bank or go over and test it yourself.

If the bank is close, go test this process yourself with the car in front of you.

I have seen this very thing happen at an incorrectly programmed ATM.

I agree with all of the advice provided above. Deal with the Reg E claim from your customer, then follow up with the bank that allowed this error to happen in the first place.

I heard of this several times in the '90's. But machines have been updated to prevent this from happening. Unfortunately, your customer = your problem. You'll need to follow the unauthorized transaction requirements of Reg E, but like others are saying, I'd follow up with the other bank.