Auditing this account and wondering if we could have handled it differently?
Customer is sole owner of DDA w/ bank, he dies 5/20/18
customer receives SSA deposit on 5/23/18
customer receives VA benefit payment deposit on 6/1/18
Bank is notified of death 6/5/18 via ACH DNE
Beginning on 5/22 through 6/4/18 there are card transactions that post on customer's account, obviously not done by the deceased customer, as transactions list a date/time and most are POS purchases with or without PIN. Bank discovers customer's daughter has been using his card.
Bank is required to return SSA and VA payments/deposits, so account then becomes overdrawn.
Is bank out the money for the card transactions that occurred after the sole owner's death? Or is there something more that could have/should have been done in this situation? Thanks.

Correction: Bank was only required to return VA benefit deposit, not the SSA benefit deposit. Regardless, the account still went OD as a result of card use after the sole owner's death.

You'll most likely receive a reclamation for the SSI deposit at some point.

Notify the daughter that she needs to make the bank whole or you will be prosecuting her for fraud.

1. Under Treasury Fiscal Service regulations (and the Green Book), once you have learned of a customer's death, you are supposed to return any ACH recurring federal payment received for the customer's account after you gain that knowledge, including any SSA payment that you know the decedent qualified for by surviving through the end of the prior month. Customer dies November 4, bank learns of death on November 6, SSA ACH arrives November 9, it gets returned R15. Customer dies November 4, SSA payment arrives November 9, bank learns of death November 12, bank does not have to return the 11/12 credit (but can't accept any more ACH Treasury payments for SSA or VA, etc.

2. On learning of the death, the card should have been shut down.