I wouldn't be overly concerned about the cause of the loss relating solely to allowing the card limit to be raised. You would likely have sustained the same loss when the customer came in and cashed a check to access the funds. If they want to defraud you, you either have to hold everything as long as possible or take the risks. It's the cost of doing business.
You didn't mention how long the customer's account had been established. This is the first field I want to look at when determining holds/etc. Can an "established" customer defraud the bank? Sure, but it doesn't happen as often as with a "new" customer. And whoever thought 31 days = "established" was nuts. It should be at least 6 months.
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