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Holds on Wire Transfers

Question: 
Are we permitted to hold wire transfers initiated by our customer? The wire would be processed and taken out of the account but kept in a holding account for 24-48 hours before being sent. This would reduce fraud by giving the customer time to notice the transaction on his/her account and contact us if it's fraudulent.
Answer: 

No federal consumer regulations support or prohibit a wire transfer from being held, but holding the funds would defeat the purpose of the wire. If you implement such a hold process, ensure the waiting period is clearly disclosed to avoid potential UDAAP issues. If this policy pertains to telephone-initiated wires, the bank might consider enhancing it or doing only in-person wires, since you could then screen for fraud immediately.

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First published on 08/23/2015

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