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#2261154 - 10/15/21 06:57 PM Account Closure due to Fraud
Anonymous
Unregistered

Hi,
If a customer deposits a fraud check and takes the money causing an overdraft (usually to buy gift cards or to send money back to the scammer)- do we have to go through the regular charge off procedures or can we close the account at a loss due to fraudulent activity and file applicable charges on them?
This would be the case if we are unable to make contact with the person or they refuse to work out a repayment agreement with us. Usually we have luck with getting the customer to set up repayment over time but occasionally we have the customer who ends up ignoring our calls or tells us it wasnt really their fault that they fell for a scam...

Thanks in advance for your help!

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#2261165 - 10/15/21 10:55 PM Re: Account Closure due to Fraud Anonymous
rlcarey Offline
10K Club
rlcarey
Joined: Jul 2001
Posts: 77,560
Galveston, TX
Not sure what you mean by regular charge off procedures, but anytime you feel you are not going to collect, you must charge off an account. As far as taking legal collection actions against the customer, that is totally unrelated to charging off the account. The act of charging off an account is an accounting function.
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#2261422 - 10/21/21 10:00 PM Re: Account Closure due to Fraud Anonymous
Anonymous
Unregistered

I'm assuming you mean following regular charge off procedures meaning sending a letter at 30 days overdrawn, sending a letter at 45 days over drawn, sending a final demand letter, then sending a closing letter?

In my experience, if you know for certain this is fraud and there is going to be no attempt to make the account whole (especially in the case of a new account), you can skip to the final demand letter, then close the account after the term (7 days, 10 days).

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