Customer deposited a check for $2,990. Teller placed a Case by Case hold and gave customer the hold notice.

Br Mgr started looking at the check and didn't feel right about it. She called Security. He called the issuing bank and found out that it is a fraudulent check. He went to the branch and took the check and had mgr place a 30 day hold on the account. (No notice to the customer). He can't do that, can he?

I'm thinking the mgr could have placed an exception hold for Reasonable Cause to Doubt collectability for 7 days, right?

The correct response would have been to impose an exception hold, "reasonable cause to doubt collectability," based on information provided by the drawee bank.

A thirty day hold is like a cry into the wilderness: "They gave me this job, but nobody trained me!"

An alternative response, I believe, would be to back the deposit out of the system and notify the customer that the deposit will not be processed (and the reason). That takes Regulation CC off the table and frankly better protects the bank.

I'd make very sure that the customer is notified quickly -- preferably the same day. Document the phone call.

Thank you gentlemen. Ken - thanks for the laugh.

Because it is fraud, wouldn't you be able to freeze the account from a loss prevention standpoint and stop all transactions?

The Reg CC hold is provided by regulation. John's alternative response, "revoking provisional credit" is provided by statute. There's nothing in the facts offered that says the payee knew of the fraud and there's no law or regulation that suggests a bank has a right to freeze all transactions on an account when only one transaction is in question.