Complaints, Forgeries, and a Deceased Customer

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Question:

We currently have an individual stating that a forgery has been committed on a DBA account that was owned by his mother. The account had an authorized signer, who was added by the account owner. The account owner passed away in November 2022 and it is the Personal Representative stating that forgeries were completed by the authorized signer's wife. I have been investigating the statements and now the Personal Representative has filed a complaint with our regulator saying we are not responding to his claim. That is incorrect. We have reached out to the bank's legal counsel on the claim, but I'm looking for advice on handling the complaint with the regulator? The forgery claim investigation is ongoing.

Answer:

If this was just a personal account with a DBA designation and not a legal entity, any authorized signer authorization was void at the time of the accountholder's death. No different than a POA. Definitely talk to your legal counsel if this is a substantial sum and you need to determine the exact date on which you were informed or gained knowledge of the accountholder's death. All of that will come into play if you are going to mount any sort of defense. You should be able to pursue any losses that you suffer with a lawsuit against the authorized signer.