We have a customer that sent a 14,200.00 wire to a business that has been found to be fraudulent. The customers are saying it is the banks fault. I am trying to find some regulation that shows that wires are based on collected funds and are pretty much irrevocable. I am not having any luck. Any suggestions?

What does your wire agreement that the customer signed say? It should lay out responsibilities.

ETA: I'd also look to see if wire procedures were followed accurately. Do you initiate call-backs to verify wires before sending them? Also what Happy said below.

do you have signed instructions from your customer to perform the wire? where they fill out the receiving bank, beneficiary, etc?

I love when the customer's argument is "you carried out my instructions but I was deceived and can't afford this loss so give me my money back."

It's a reflection of the current trend to never accept blame for one's own ignorance/naivete/stupidity/gullibility (pick one or substitute a "disability" of your choice).

...hence we have the Remittance Transfer rules effective Feb 2013...<deep sigh>...

We just had this happen for a larger amount of $...one wonders what part of FINAL is not understandable.

BrianC are you referring to the Remittance Rules for Foreign Transfers..thought the effective date to be January 21 ?

According to Alphabet Soup the date is February 7, 2013.

The Bureau first forecast that it would be effective on 1/21/13, but decide to go with one year from date of publication in the FR, which took a bit of time, and didn't occur until 2/7/12; hence the 2/7/13 date.

We did have signed instructions from the customer, they were in the branch at the time of the transaction. They called us later that day to say that the business was fraudulent, but by that time it was too late. They have sent us an "official" letter outlining their complaint. Guess we will just have to wait and see what happens next. I feel bad for them, but they were the ones that didn't check out the business well enough before sending them a large sum of money. Still don't see how that is our fault. Though I am sure in the end we will wind up holding the bag....sigh

Even if the Remittance Transfer Rules were in effect last month, they would not have protected this customer from himself, except he would have known in advance how much the fees would be for him to do something foolish.

Our wire wouldn't be affected by the Remittance Transfer Rules anyway (even though eventually sent out of the country), since final destination was US. A second wire sent it out of the country. Is this correct thinking, John?

Hopefully, the Remittance Transfer Rules will be spelled out more simply by the time they are effective.

Correct, Kiemo, assuming your initial wire instructions didn't include that second step.

Take a look at your Wire Receipt or what ever wire agreement/instructions you had the customer sign.

Our says in bold... right up top...
The originator requests payment to be made to the beneficiary or account number named below: To the extent not probibited by law, the originator agrees that this wire transfer is irrevocable and that the sole obligation of the institution named above is to exercise ordinary care in processing this wire transfer and that it is not responsible for any losses or delays which occur as a result of any other party's involvement in processing this transfer:

If they wrote out a legit check to John Smith for $14,000 then John came over happily to cash his check, money out the door, but then your customer found out that John Smith ran a shady business would you give them their money back? How is that your fault?

The Bank acted upon the customer's instructions and if you all acted responsibly then you shouldn't be held responsible.

anybody else willing to share their language on their wire transfer form to address this issue? We have the customer sign the wire transfer form with all of the detail info, thinking their signature should be enough but would like to add some language to protect the bank. Thanks,

My opinion is that, under the terms of Regulation J, your obligation is to interact with your customer on the basis of "fair dealing", meaning you took their request in good faith and followed their instructions accurately. But there's the larger legal principal of how a "reasonable person" would view this situation. Shifting the blame for one's stupidity to another is, unfortunately, our immature society's view of the world but it doesn't hold up in a court of law. There's no possible way you could ever know that the beneficiary was fraudulent. Any court that agreed with the plaintiff in such a case would be overturning centuries of common law. I wouldn't lose any sleep over this situation.