Social Security Reclamations
Answer by John Burnett, BOL Guru
Question: If the funds deposited from Social Security have been withdrawn, is the bank liable for the amount stated on the reclamation?
Answer: There are exceptions to full liability if the bank was unaware (and is not presumed to have had constructive notice) of the death of the depositor. Look to the Fiscal Management Service's Green Book Reclamations discussion, specifically in section 2 of that part.
The Green Book only deals with payments made by direct deposit. If the payments were made by check, the same exceptions to liability are not available.
First published on BankersOnline.com 6/06/05
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