Scenario: Mom has daughter on savings acct. Both have debit cards tied to acct. Mom has daughter removed from savings but bank fails to remove savings from debit card so daughter still has access. Two months later, mom fills out dispute form for ATM transactions she never did but tells bank employee that she knows daughter did the w/d. Daughter says she didn't realize she was w/d from mom's acct; she thought she was w/d from her savings. Realize we can't require mom to fill out police report but since bank knows who did the w/d, can bank contact police to pursue daughter to get reimbursed? Total is approx $2000.

If you give Mom the funds back then yes, absolutely, you can contact the police to file a report and pursue the daughter. Or, are you trying to get the police involved prior to actually being out the funds?

But, if the daughter is telling the truth, then shirley she still has the $2000 in her account, right? Tell her to give it back to Mom and you won't have to contact the police.

And definitely make this a teachable moment for the employee who left the card active...

On a non-Reg E related point, this is why I always recommend closing an account and opening a new one whenever an owner is removed.

To the question of how to handle the claim. First if the daughter thought she was withdrawing from her savings, does she have an account that you can debit for the withdrawals? Go that route first since she admits to receiving the money. Second, has a crime actually been committed here? If the bank failed to attach the cards properly and this is truly an error, the PR nightmare of pursuring the daughter with law enforcement over a mistake the bank made is the stuff that the 11:00 news is made of.

I'd try working with the daughter first. If you can't prove intent for theft/fraud, etc. you're only other option may be to pursue the daughter in civil court.

Stronger than Brian's comment, if the bank allowed the daughter to be removed, the bank created the problem. Very poor practice and a good demonstration of poor follow thru in not removing access to the account.

Did the mom do, authorize or benefit from the transfer - if no, you very possibly you have a claim to pay. And since it was an "authorized access device" remember mom has no liability.

If the daughter thought she was withdrawing her own funds from a different account, than the money should be there. Check into setoff. (Did the daughter know she was off the joint account?)