Our customer admits she was "partying" when her debit card went missing. There is $1000+ charges she wants reimbursed for between ATM and POS transactions. She says she thinks she knows who is responsible and if she prosecutes she will repay the bank. Is there anything that we can do to not have to give her the money?

As long as she reported the loss promptly you will need to reimburse her.

I would make her put information in writing before reimbursing and then you have 10 days to investigate before reimbursing. I would also try to obtain video of POS and ATM transactions. We had a similar situation as yours and customer was in back seat of car with "partyers". Either way, they would never get another card at our bank.

Regulation E allows you to require that the consumer put the barest minimum of information in writing as a condition of providing provisional credit. But it does not permit you to refuse to process her error complaint even if it's only made orally. Other than that, I agree with BSA guy's suggestion that you attempt to get video or photo evidence of whether or not your customer participated in or benefited from the withdrawals (and not reissue a card).

In addition, once the transactions are declared as unauthorized, you have to meet the requirements of both 205.11 and 205.6

further, as your institution will take the loss, it will be up to you to prosecute the individuals who did the transactions not the customer.