We have a customer who filed several forgery affidavits about one year ago. At the time, the customer believed his son stole his checks. We closed the account and opened a new account for the customer, explaining the importance of safegaurding checks, etc. from further misuse.

Our customer is now back and is claiming forgery and POS disputes and again says he believes his son stole his checks and debit card. Do we have to honor the POS disputes or is there something similar to the UCC regarding forgeries that the customer did not excercise ordinary care and deny his claim?

You will have to honor the POS disputes. I am assuming the customer has never authorized the son to use the card, as they have had prior bad experience. I would ask the family to file a police report for the stolen card and the purchases. Then I would pursue prosecution of the son if I could get him on film using the card or maybe get hand writing analysis.

Does it make a difference if any of the disputes are PIN transactions?

POS or PIN, it doesn't make a difference. Either way, you have to accept the claims, unless, as Whodunit said, the father previously gave the son permission to use the card, then revoked it and didn't notify the bank that the son was no longer authorized to use the card.

Also, you can ask the customer to file the police report, but you cannot require it. And if they do not file the police report, you cannot use that as a reason to deny the claim.

But you certainly will want to think heavily as to whether to issue them another debit card. When you ordered a new debit card for the customer, did you also change the PIN? Just curious.

I too would hesitate to order another card or open another account for this customer. This could very easily turn into a situation where the consumer knows exactly what is going on when the card gets "stolen".

Yes, we do change the PIN when we reorder a new card. We have already closed the account and will not be opening a new account due to the history with this customer. Thanks for all the help!