Consumer complaint received 2017-07-23
Product: Money transfer, virtual currency, or money service — International money transfer
Issue: Fraud or scam — 
Company: HUNTINGTON NATIONAL BANK, THE (MI)

To give you the general idea, my mother was conned into making 4 different wire transfers through 3 different banks to her " boyfriend 's '' overseas friends. They used fake identity 's to pick up the funds. I have a power of attorney for her. This complaint specifically concerns Huntington Banks mishandling of the situation and misinterpretation of regulation e. The availability date on the wire made from Huntington was XX/XX/XXXX. The confirmation page we received along with supporting documentation is available upon request. We informed Huntington Bank of the error on XX/XX/XXXX, although when we called them we received a lot of responses to the effect of " once the wire leaves our hands it is not our responsibility ''. It was n't until XX/XX/XXXX that we found someone at Huntington who could help to attempt to recall the wire. I believe under regulation e ( if i 'm reading it correctly ) a fraudulent pick up is covered and the banks are required to refund the total funds, rather than just the fee associated with the wire. We received a letter from Huntington dated XX/XX/XXXX in which Huntington agreed there was an error due to failure to make funds available by the disclosed date and refunded my mother the XXXX dollar wire transfer fee. I believe they are required to refund the whole amount rather than just the fee. Specifically I believe huntington read this section of the code : a. refund the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted or the amount appropriate to resolve the error, or b. make available to the designated recipient, the amount appropriate to resolve the error without additional cost to the sender or the designated recipient ( 12 CFR 1005.33 ( c ) ( 2 ) ( i ) ).
In addition to this comment : The Bureau is revising proposed comment 33 ( c ) -4, however, to respond to a request from a Federal Reserve Bank commenter to resolve ambiguities in the relationship between the remedies in 1005.33 ( c ) ( 2 ) ( ii ) ( A ) ( 1 ) and ( 2 ) and the remedy in 1005.33 ( c ) ( 2 ) ( ii ) ( B ). Specifically, the Bureau has revised proposed comment 33 ( c ) -4, renumbered as comment 33 ( c ) -8, to clarify that the remittance transfer provider must correct the error in accordance with 1005.33 ( c ) ( 2 ) ( ii ) ( A ), as applicable. Therefore, if the remittance transfer was made available to the designated recipient, but on an untimely basis, the remedies under 1005.33 ( c ) ( 2 ) ( ii ) ( A ) would not be applicable. In that circumstance, the amount appropriate to resolve the error would be XXXX since the entire transfer amount was made available to the designated recipient. The sender 's only remedy in this case would be the refund of fees under 1005.33 ( c ) ( 2 ) ( ii ) ( B ). If, however, the funds were never made available to the designated recipient, then the sender would have one of the remedies available under 1005.33 ( c ) ( 2 ) ( ii ) ( A ) ( 1 ) or ( 2 ) in addition to the remedy of the fee refund under 1005.33 ( c ) ( 2 ) ( ii ) ( B ). The Bureau also believes the renumbering in 1005.33 ( c ) ( 2 ) should make this clear. And Interpreted it to mean that they only had to refund the wire transfer fee. I also suspect that they did not investigate the error and instead just agreed there was an error and refunded the XXXX dollar wire transfer fee, which is covered under the following paragraph : Correction without investigation. A remittance transfer provider may correct an error, without investigation, in the amount or manner alleged by the sender, or otherwise determined, to be in error, but must comply with all other applicable requirements ( Comment 33 ( c ) -10 ).
However, when reading comment 33 ( a ) -4 this is what I 'm seeing : 33 ( a ) ( 1 ) ( iv ) Failure To Make Funds Available by Date of Availability Proposed 205.33 ( a ) ( 1 ) ( iv ) generally defined an error to include a remittance transfer providers failure to make funds in connection with a remittance transfer available to the designated recipient by the date of availability stated on the receipt or combined disclosure, subject to two specified exceptions, discussed below. The Board proposed comment 33 ( a ) -4 to provide examples of the circumstances that would have been considered errors under proposed 205.33 ( a ) ( 1 ) ( iv ). These circumstances included : ( i ) The late delivery of a remittance transfer after the stated date of availability or non- delivery of the transfer ; ( ii ) the deposit of a remittance transfer to the wrong account ; ( iii ) retention of the transferred funds by a recipient agent or institution after the stated date of availability, rather than making the funds available to the designated recipient ; and ( iv ) the fraudulent pick-up of a remittance transfer in a foreign country by a person other than the person identified by the sender as the designated recipient of the transfer. Fraudulent pick-up, however, did not include circumstances in which a designated recipient picks up a remittance transfer from the providers agent as authorized, but subsequently the funds are stolen from the recipient. Several industry commenters objected to the inclusion of fraudulent pick-up as an error. These commenters suggested that the remittance transfer provider should not be responsible for fraud that results in the pick-up of a remittance transfer by a person other than the designated recipient where the provider is unlikely to know or have control over all the intermediary institutions involved in the transfer or the final institution that will make the funds available to the designated recipient. Other commenters, including the OCC, suggested that this error might result in friendly fraud where a sender claims the amount was not an authorized pick- up when the pick-up was actually legitimate. The OCC was also concerned that the exposure to remittance transfer providers for this error may be aggravated in situations involving large dollar remittances and because of the long period of time that a sender could assert this error. One industry commenter noted that while there may be certain instances when fraudulent pick-up should be considered an error, there may be other circumstances when fraudulent pick-up should not be an error. In particular, this commenter suggested that where the name of the person picking up the funds does not match the name of the designated recipient set forth in the receipt, the sender should be able to assert an error. However, if an individual presents fake identification in the name of the designated recipient, this commenter stated that this fraudulent pick-up is outside of the remittance transfer providers control and therefore, should not be considered an error. Industry commenters also believed that a remittance transfer provider should not be liable for a fraudulent pick-up when a provider and its agent has complied with fraud and risk management policies and procedures. As the Board noted in the XX/XX/XXXX Proposed Rule, treating fraudulent pick- up of a remittance transfer as an error is consistent with the scope of unauthorized EFTs under 1005.2 ( m ), which includes unauthorized EFTs initiated through fraudulent means.See comment 2 ( m ) -3. Although identity theft can present a challenge to remittance transfer providers, financial institutions face similar challenges with respect to unauthorized EFTs and bear most of the risk. Moreover, similar to remittance transfers, the entity in the best position to verify the identity of the person initiating the EFT ( for example, the merchant at a store who initiates an EFT using a debit card ) may not be known or controlled by the financial institution, though such entities may have agreed to abide by system rules ( e.g., payment card network rules, ACH system rules ). However, under current laws governing EFTs, whether the financial institution knows or has control over that entity ( e.g., a merchant ) does not affect whether an EFT could be an unauthorized EFT. Similarly, the Bureau believes that whether a fraudulent pick-up should be considered an error should not be affected by the relationship between the remittance transfer provider and the entity distributing the remittance transfer to the designated recipient. Furthermore, the Bureau agrees with the Boards reasoning in theXX/XX/XXXX Proposed Rule that it is  appropriate to treat these circumstances as errors because the remittance transfer provider, rather than the sender, is in the best position to ensure that a remittance transfer is picked up only by the person designated by the sender. For example, in some models, remittance transfer providers could require or contract with the entity distributing the funds, if it is not the remittance transfer provider itself, to request and examine identification from the person picking up the funds. The Bureau believes that including fraudulent pick-up as an error would better align the remittance transfer providers incentives to prevent this occurrence with the interests of the sender. So in essence I believe all 3 banks should be liable for the money, but this complaint specifically addresses the issue in regards to Huntington bank. We have tried to request the documentation they relied on to make the decision that an error had occurred and we were greeted with another layer of incompetence. The person my mother spoke to on the phone said their documents were all internal and we were n't allowed access to any of them. On XXXX she also tried contacting the person we found that helped us the first time and that person gave a similar response. My mother is planning to talk to her again next Monday ( XXXX ) due to her being somewhat busy the first time. She is also planning to ask if there was a suspicious activity report submitted, but if the first two banks are any indication they wo n't know what that is either. I have the wire transfer confirmation pages I can attach, along with documentation of our interactions with Huntington staff upon request.
Overall in regards to Huntington I have two complaints, the first being that they do not have the appropriate procedures, documentation, and training in place to deal with these errors, as evidenced by the fact that it took us calling multiple branches and locations to find someone capable of assisting us in the recall and in the asserting of an error, the second being that they are liable under Regulation E to refund the money which they are not doing.
Please contact me with any questions you may have. Thank you