Reg CC and Fraud

Posted By: Anonymous

Reg CC and Fraud - 02/01/22 05:18 PM

If we have a customer that deposits a check into their checking account that we suspect might be fraudulent, can we place a hold on it? if so, what type of hold would it be? Reason to doubt collectability?
Posted By: SmallBankBSA

Re: Reg CC and Fraud - 02/01/22 09:46 PM

"reason to doubt collectability" should only be used if you have reason to believe the check will not be paid.
did you contact the paying bank to verify funds or anything about the check? Based on what you're saying you "think" it will not be paid.
Is it a new account? have they had over drafts? is it a large dollar check?
Posted By: Adam Witmer

Re: Reg CC and Fraud - 02/02/22 02:16 PM

dmk124, why do you suspect the check might be fraudulent?

As SmallBankBSA said, you need to have good reason to believe the check won't be paid. Specifically, Regulation CC says that if you are going to use the "reasonable cause to doubt collectability" special exception hold, you must have "facts that would cause a well-grounded belief in the mind of a reasonable person." In addition, Regulation CC says that "such belief shall not be based on the fact that the check is of a particular class or is deposited by a particular class of persons."
Posted By: P*Q

Re: Reg CC and Fraud - 02/14/22 04:44 PM

Check their overdraft history, that's the most frequent extended hold reason we place.
Posted By: RVFlyboy

Re: Reg CC and Fraud - 02/16/22 09:29 PM

If you suspect the check may be fraudulent, you can always refuse to accept it for deposit and offer to send it for collection instead. Then you don't have to worry about Reg CC and if the check is fraudulent, it won't be able to be successfully collected.
Posted By: KarenK

Re: Reg CC and Fraud - 08/12/22 04:12 PM

Are there any exceptions to Reg CC hold time frames for fraud? At times the longest hold period is still too short of a time frame.
Posted By: rlcarey

Re: Reg CC and Fraud - 08/12/22 04:43 PM

Describe the fraud you are talking about. If you suspect fraud, you refuse the deposit.
Posted By: KarenK

Re: Reg CC and Fraud - 08/12/22 05:35 PM

depositing a check into an account where the person may have deposited other fraudulent checks. I also suggested to just not take the check, that wasn't received very well. IE: Customer service aspect.
Posted By: rlcarey

Re: Reg CC and Fraud - 08/12/22 05:46 PM

You have an individual that you believe is depositing fraudulent checks and someone is worried about a customer service issue? That someone has a screw loose. Close the account and be done with it or otherwise you are stuck with either Reg. CC, sending the check for collection, or refusing the deposit.
Posted By: Rocky P

Re: Reg CC and Fraud - 08/12/22 07:35 PM

"Dear Branch Manager, it's your choice to keep the account open, but if any check comes back as fraudulent, the amount will be reimbursed to the bank from your end of year bonus."

Bet the mindset changes
Posted By: HappyGilmore

Re: Reg CC and Fraud - 08/15/22 05:47 PM

we already have the in place, Rocky, but it impacts the entire branch's quarterly incentive, puts the onus on all associates, not just the manager. this certainly makes everyone more vigilant and a lot less likely to scream "but they're a good customer"!
Posted By: Rocky P

Re: Reg CC and Fraud - 08/15/22 08:24 PM

{{ Like }}

A major Bank in FL in the mid 90's did a relationship analysis, ranking the profitability of clients. The top 10% of the profitable customers produced over 75% of the income for the bank. The bottom 1/3rd accounts all lost money. They started a "rank and yank" program. Profits increased every quarter as the lower accounts went to other banks.
Posted By: KarenK

Re: Reg CC and Fraud - 08/19/22 03:09 PM

I think I will suggest the collections aspect. rlcarey, Loved your comment though