I wired money to a bank in another state for a car that I never received, but called the bank to warn them of a possible scam. What is the liability to the bank if they are holding stolen money in an account for one of their customers, especially if they have been told so? Could the bank be responsible for refunding the money that I lost? I notified them of a potential problem on the day that I wired money from my bank to the account holder at their bank. I was told for a week that the money was still in the account. Now, they will not tell me anything. Does Regulation E cover this type of situation? Will the bank refund my money if the account holder stole it from me? What if the money is not still there?
If I told my bank money in an account was stolen, that doesn't make it so. The bank is not liable; they carried out instructions as ordered.
In most cases like this, the wired funds would have been removed from the account very quickly. If they were there longer, that would be unusual. The bank had no obligation to pull the funds because you called and requested this. They'd have needed proof of what was happening. What would prevent a dishonest buyer from receiving the car and claiming fraud to get their money back and still have the car too?
The bank is not an escrow agent and shouldn't be used as one. If fraud was evident, a police report should have been filed and you could have worked through your bank where the wire was sent to attempt to freeze the funds until it could all be sorted out. Wire transfers are excluded from Reg E, so you won't recoup your money there.
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If I told my bank money in an account was stolen, that doesn't make it so. The bank is not liable; they carried out instructions as ordered.