There is no such thing as "friendly fraud" in Reg E. There are authorized transactions and unauthorized transactions and it doesn't matter if it was a child, sibling, spouse, etc., so long as that person isn't on that account, they had no right to take the owner's money.
Because of that, the only allowance to be made is one of courtesy. You'd want to tell a parent, as an example, that the claim will be reported to the police because that is the bank's policy as the bank steps into the consumer's proverbial shoes and has the loss. I have had parents withdraw their claim at that point, and I have had them say maybe this is what the child needs to get straightened out. Otherwise, it is a claim to be handled as you normally would any similar claim.