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Unauthorized Withdrawal by Estranged Spouse

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Question: 
Should we pay an unauthorized withdrawal claim if the suspect is the customer's estranged wife? Customer has completed the affidavit naming the suspect as his wife. Local law enforcement has advised they will not file a case because of community property.
Answer: 

Assuming the claim concerns an EFT covered by Regulation E, I don't believe that your customer's rights are affected by his marital (or, as frequently misspelled, "martial") status. Either the transaction was done with his authorization or not; he either benefited from it or not; he was either complicit in the transaction or not. Regulation E's protections are not affected by whether or not the customer or spouse is located in a community property state, or by whether or not police will pursue a case.

The bank must demonstrate that the transaction was not unauthorized. Or the bank must pay the claim.

If Regulation E is not involved (assume the withdrawal was made over the counter), repeat all of the above.

If the bank is able to demonstrate, with or without the assistance of its customer, that the estranged wife made the withdrawal and that she did so without authorization, the bank can pursue the wife for recovery in a civil case, even if it cannot pursue a criminal complaint.

First published on BankersOnline.com 07/04/05

First published on 07/04/2005

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