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Fraud Documents to Sign before Credit Back

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Question: 
When I have fraud on an account, I send out fraud documents to the member and require they be signed and returned before we can get credit back. If the member never signs the documents and time expires to do this, does the credit union have any recourse for the member, can we charge it back to them legally or does the credit union have to take the loss? What should be done?
Answer: 

Considering you don't even tell us what sort of items you are referring too (checks, EFTs, etc.), it is impossible to answer your question. If you are referring to transactions covered by Regulation E, requiring the consumer to sign and return fraud documents in addition to giving you written confirmation of the error will violate Regulation E, if you are not providing provisional credit and beginning the investigation.

First published on 05/26/2019

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