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#2264196 - 12/31/21 09:00 PM Possible Fraudulent Debit Card Credits/Deposits
bropliance Offline
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Joined: Jul 2014
Posts: 12
East Texas
Our fraud department is investigating an account that has had hundreds of Debit Card Credits/Deposits post to an account within a few day span. There are also other suspicious transactions. They wanted to place a hold on the deposits while they investigated, but that doesn't seem to be allowed under Reg CC. It was recommended to us that these would fall under a Reg E Investigation and that we could hold the funds for 10 days while we investigated. We can't seem to support that under the regulation. Any advice would be appreciated.

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#2264198 - 12/31/21 09:13 PM Re: Possible Fraudulent Debit Card Credits/Deposits bropliance
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
What type of account, what type of deposits and debits, i.e., amounts, where from and to, etc. Have you contacted the customer? You could always do an emergency closure.
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#2264199 - 12/31/21 09:16 PM Re: Possible Fraudulent Debit Card Credits/Deposits bropliance
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,205
Illinois
Quote
It was recommended to us that these would fall under a Reg E Investigation and that we could hold the funds for 10 days while we investigated.

There's no such thing as "provisional debit" in Regulation E. Since these deposits don't involve checks, Reg CC holds also do not apply.

What you likely have here is a money mule sitatuion where fraudsters have used stolen card information to either issue fraudulent refunds for purchases that were never made or fraudulent P2P transfers through Venmo, PayPal, CashApp, etc.

As Randy states, the first step is to contact the customer to inquire about the source of these credits. You should review your account agreement as any ability to hold funds during a fraud investigation would be stated there.
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#2264200 - 12/31/21 09:26 PM Re: Possible Fraudulent Debit Card Credits/Deposits bropliance
bropliance Offline
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Joined: Jul 2014
Posts: 12
East Texas
It's a consumer checking account. We suspect they might be a mule. The credits and debits are from PULSZ.com. The majority of them are $99.99.The customer is also making large cash deposits at the ATM, but came in to the bank to withdraw a large amount of cash. They are planning on closing the account.

This is from our T&C: Reasonable notice depends on the circumstances, and in some cases such as when we cannot verify
your identity or we suspect fraud, it might be reasonable for us to give you notice after the change or account closure
becomes effective. For instance, if we suspect fraudulent activity with respect to your account, we might immediately freeze
or close your account and then give you notice.

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#2264202 - 12/31/21 09:38 PM Re: Possible Fraudulent Debit Card Credits/Deposits bropliance
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,205
Illinois
PULSZ.com is an online casino based in Gibralter. A lot of these sites circumvent Regulation GG by selling "play tokens" for their games and then add "sweepstakes entries" cooresponding to the amount of chips purchases. Players can then either use their play chips or their sweepstakes entries to play games. If they win the sweepstakes, then they withdraw their funds back to their debit card. It sounds like they are buying chips at $99.99 / pop.

Large ATM cash deposits could be indicative of winnings at a local casino followed by withdrawals to go play some more.

It sounds like you have a gambler on your hands, not a mule.
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#2264577 - 01/11/22 04:32 PM Re: Possible Fraudulent Debit Card Credits/Deposits bropliance
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,544
Cape Cod
It also looks like it's an account you should not be spending a lot of time and money monitoring. If you don't suspect fraud, you can look to your deposit agreement for guidance on whether you need to provide notice. The sooner you can show this customer the door, the better, IMHO.
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