We have a customer who has in the past let his grandson go to the ATM and get cash for him. He recently came in to say an ATM charge on his statement was not done by him. He merely asked for our assistance in obtaining a picture of who conducted the transaction, thinking it was his grandson. Employee completed an EFT error dispute and turned it over to the REG E department. Turns out, it was his granddaughter. He did not authorize it, but said he would get the money back, he did not want the bank to take the loss. MY QUESTION: can we get criticized for having knowledge and not refunding the customer on an EFT error when the customer clearly states they do not wish the bank to refund the money?

I would ask him to sign and document. Then mail a letter stating his choice to withdraw; be sure to keep a copy for your records. Reg E is a very consumer friendly regulation, but nowhere is it stated that a customer cannot withdraw a dispute. We have had similar circumstances when a customer has disputed, viewed ATM images, then withdrew because they wanted to protect the son/daughter/grandchild/etc. In this case we close the dispute without credit. Or if provisional credit had already been provided, we reverse the credit and then close.

Thank you for your input.

I agree with burkemi. Years ago I had a client with a similar story, except it was a boyfriend/girlfriend issue. She didn't want to dispute the charge. Months later, after they broke up, she then decided she wanted to dispute all of the charges. It was then that I started advising clients to always get a "I'm aware of this but do not wish to dispute these charges" affidavit signed by the customer.

If they later come back and want to dispute the charges, I think a strict read of Reg E would require the bank to still provide credit, but I doubt any customers would do so once they sign the affidavit.