Hypothetically, if a customer deposits cash and initiates a wire transfer in person. We identified the customer properly and followed the wire instructions exactly as the customer requested. The customer now says they feel the recipient had scammed them in a transaction to purchase a good or service from the recipient. Are we responsible to credit the customer back?

No. Once a wire is sent the money is gone. If your customer feels they have been scammed, you can invite them to file a complaint with the government's reporting website www.ic3.gov. In addition to filing the complaint FinCEN Advisory FIN-2019-A005 encourages the financial institution to contact its local FBI or Secrect Service field office as they may be able to assist in trying to recover the funds.

You should also evaluate your due diligence procedures, one stray wire is likely not to cause an issue, but if we have a habit of sending wires without asking questions about the purpose of the wire to try and help identify fraud, we could find ourselves in a simiar situation as Western Union

you can also do a recall request from the beneficiary bank, including suspected fraud as the reason for the recall. timing is critical, so it generally has to be quick or the funds are gone