Customer reports she hired an online company to work on her computer, but they "hacked" her computer. At their (heavily accented) direction, she logged into her online banking. The "company" transferred funds from her savings to her checking accounts, making it appear she had extra $ in checking. They told her they had given her extra money, she was to withdraw the funds and wire the money back (to China). Which she did.
Is there anything we can or should do for this customer?

Tell her that she apparently is not savvy enough to posses either a computer or a banking account. Suggest she get rid of the computer and you will take care of the rest.

Otherwise - no. She is a victim of her own ignorance. I would normally suggest attempting a wire recall, but it being a foreign wire and under the circumstances it would be a wasted effort.

File your SAR if the amount qualifies.

thank you RL! Totally agree!

Perhaps its time for all banks to consider this and the encryption attacks and the like and review their customer education efforts.

There just isn't much a bank can do when a customer withdraws their own money and sends it off. This may well have been one of those cases where if you said it was a scam, the customer would refuse to believe it.

There is only so much you can do.

Thanks for letting me resurrect this ancient thread. We continue to run into the scam described in the original post. Our process is to treat the transfer from Savings to Checking as an unauthorized transfer under Reg E since it was initiated via online banking.

However, we have a division of opinion as to whether, where the customer either wires the money or, more commonly as of late, goes to Walmart and purchase iTunes gift cards at the direction of the scammer, we owe the customer reimbursement under Reg E for the entire claim.

The first school of thought thinks we owe the customer for the entire amount of the unauthorized transfer from Savings to Checking regardless of what happened to the money once it hit the Checking account. In this scenario to make the customer whole we would transfer any remaining funds back to savings from checking and reimburse/take a loss on the rest.

The other school thinks the customer is out of luck here because they spent the funds from the checking account. This would seem to view the entirety of the scam through a Reg E lens.

I'm inclined to think the first group has it correct because the unauthorized transaction was the transfer from Savings to Checking (whereas the second transaction, the gift card purchase, was executed by the customer).

This feels like a morass. Thoughts?

Although transfer from savings to checking was not authorized, remember that the definition of an unauthorized electronic funds transfer in 1005.2 has a two prong test:

Unauthorized electronic funds transfer means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit.

No money actually left the bank in the savings to checking transfer and the customer received benefit from the transfer in that their checking account now had more money in it. Put me in camp #2 that the customer is out of luck.

Stone cold! But perhaps correct? It may be that I am feeling too much sympathy for the customer who has been scammed. Thanks for the input, I'm curious if anybody else out there feels similarly. Ultimately, the bank is going to have to make a supportable decision on how to handle these situations as they seem to be increasing somewhat in frequency.

I say this is pretty cut and dry, as Brian mentioned, the transfer went into her own account from which she wired them out. Unfortunately, she's out the money. There are few situations where the rules are on the bank side, we take so many losses resulting from card and electronic fraud, this is one the bank isn't on the hook for.

We've had this happen also. Scammer transfers funds from the customer's savings and deposits into their checking. Tells them they deposited too much and the customer needs to return the funds. Customer withdraws the funds from the checking and purchases gift cards which they give to the scammers. We have not been taking the loss.

"Stone cold! But perhaps correct? It may be that I am feeling too much sympathy for the customer who has been scammed."

While I feel for many customers who fall victim to this, you should not give the bank's money to customers who were scammed and feel the bank can take the hit easier than they can. That isn't your job. Soon the bank would be scammed. A big one in my area a year ago was scammers getting high schoolers involved. In a nutshell, scammer gives student check to deposit, bank provides immediate credit, scammer withdraws money and gives the kid a small cut. It's a "victimless" crime says the scammer. And to add insult to injury the kids debit card is often replenished by the parents account. The scammer takes all they can get if the transfer works. And you might be able to go another step if the parents have a line of credit feeding the DDA when it falls below $X.

I've seen claims that were denied for whatever reason, usually it is believed an authorized transaction, and the customer argues because their friend had the same situation and their claim was paid. This customer was stealing from the bank because they heard it was easy money.

If you follow Reg E, you'll be right.

Thanks everyone, I'm coming around on this and appreciate the discussion.