This is covered by Regulation E, passed by Congress and enforced by the Federal Reserve. The exact procedure depends on the bank, but most banks go with the most lenient procedures allowed under Reg E, so that's what I'll describe here. There's a rather legalese description of the regulation at http://tinyurl.com/aqc3o . The good news is that your friend reported the breach in a timely manner, so she is only liable for the first $50 in unauthorized transactions. Most banks will refund that as well, especially in cases like your friend's, since this could be construed as their mistake. If it were a case of lending an ATM card to the boyfriend, and he drains the account, they usually don't concede much.The bad news is that since this happened within the first 30 days of the initial deposit, they can take longer that usual to resolve the process. We're talking up to a month to get the money back.The bank has twenty business days (ten if this weren't a new account) to investigate the transaction and determine whether to credit the funds back. If they have not completed the investigation by the end of twenty (ten) business days, they have to give your friend "provisional credit," meaning that they'll give her the money and keep investigating for another 90 business days (45 if this weren't a new account). If they learn over those 90 (45) days that the transaction was legitimate, they can take the money back.This isn't required by law, but if the bank figures out that the transaction was unauthorized on, say, day three, a good bank will credit the money back immediately. That's just good customer service. I believe B of A has a policy of crediting disputed funds the next business day, a policy which I'd like to see that catch on. Twenty business days is just too long to wait when your whole paycheck has been stolen.--LaughingRavenExtreme Banker, Ret.
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