Customer Joe, deposits a check for $1500, which was for the sale of his deceased father's 64" flat screen TV. The $1500 turns out to be stolen and fraudulent. Police call me to let me know that Fred's daughter Mary stole the check from Fred. It has not come back to us, yet.

Joe, not a well man, and who was being cared for by Mike, indicates his SS card, ID and debit card have been stolen and that half a dozen transactions were not authorized by Joe.

Turns out Mike is a friend of Mary who the TV was sold to and who purchased it with the stolen check.

My question, what are our responsibilities if the check that Joe is wanting reimbursement for is a fraudulent check. What steps do we need to take. I don't think Joe is involved with the check scam, but all the same its a bad check he wants reimbursement for. Thanks.

Joe taking a fraudulent check is not the bank's problem. If he seeks reimbursement, he has to pursue Mary.

Check your time frames to make sure you're not waiting on a late return for a forgery. It may end up being the paying bank's problem instead of Joe's.

So we would still need to make reimbursement to Joe-for the transactions not authorized by Joe?

If Joe reported his card as stolen, then it would appear that he would be eligible for credit for the unauthorized transactions under Regulation E.

You're talking about 2 separate things. Card fraud and check fraud. He would appear to have a claim for the card transactions, but you would not seem to have any liability under those circumstances for the check fraud.