I was wondering our operations department says that we can not send fraudulent debit card and ACH withdrawals from a customer's account back as fraudulent activity. They are telling us that we have to pay the items then charge them off as a loss for the bank is this correct? I remember reading somewhere that we have a certain time frame to return those items. Thanks for the help in advance.

I can't speak for ACH transactions but for debit card transactions where the card was present, receipt signed or PIN used, and an authorization was obtained, there are no chargeback (dispute) rights. Debit card transactions cannot be returned, only disputed. Generally speaking, in cases of fraud where the customer says, "Wasn't me, didn't do it", the issuer (bank) takes the loss.

The card was comprised online and all the purchases were done online from different companies that the customer has never heard of.

Ahhh, that changes things a bit. Sometimes an unauthorized, fraudulent internet transaction can be successfully charged back. The merchant could represent the chargeback if CVV2 or Address Verification was used (or they may have supply other documentation showing that it was your cardholder). How much of a loss are you looking at? If it's a small amount (say under $25) I would just write it off. A larger amount is probably worth disputing because you could possibly get some of the funds back.

Fraudulent ACH transactions can be returned. For a consumer account, you have a window the permits the consumer to examine his account, identify the fraudulent transaction, sign a Written Statement under Penalty of Perjury (WSUPP), and obtain a refund. If processed on time, you can recover your funds up to 60 days after Settlement Date for a fraudulent ACH debit to a consumer account.