We have a gentleman that is disputing several debit card transactions starting June 2016 thru August 2016, the gentleman says that it is his live in companion using the card and that he had previously given her the PIN number (all the transactions are PIN based). Upon review of his account we found checks that may have been forged we spoke with the customer and he has stated that he has never written her a check. We instructed the customer to file a report with local authorities and to bring in the paperwork for the checks. It has been several days and we have not received any paperwork from him. He also stated that she has been in jail before and her mom was dying back in February and he had some trouble like this with her then but felt sorry for her so he didn't report it. Before we knew the entire story we issued him a new debit card and instructed him to secure it from her, within hours she was using the new card and writing checks to herself. What is our options?

First, you can't delay (until the customer files a police report) your investigation of the claim that the "gentleman" made concerning the June -- August debit card transactions. You can, however, refuse to treat them as unauthorized electronic fund transfers (UEFTs) based on the definition of UEFTs in the regulation at 1005.2(m). Your customer gave the live-in the card and PIN for use previously and had not notified the bank that the companion's use was to be terminated.

You can require the police report in connection with the apparently forged checks. You can also require your customer to provide you with an affidavit that those checks are forged. I'd also look at those checks and see whether your customer is too late in notifying you about them.

You can also shut the customer and his account down and bring charges against his companion if the bank sustains any loss. The customer has made it clear he can't manage his account and isn't capable of keeping it from being used by his companion. This situation shows every sign of being one that won't go away on its own.

If the customer is elderly, you may have an elder financial abuse case to report.

In addition to all of the good advice that John provided above:


If your depositor makes a claim against the bank with respect to the recent forged checks, review your Deposit agreement for any language about repeat offenses by the same wrongdoer. You may have language that protects the bank against any new claims if the depositor failed to report earlier forged items by the same person.

Hot card!! And everything else they said.

Good luck.

How should the letter denying the claim be written to the customer that is in compliance with Reg. E?