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Question & Answer
Question: We had a customer who called and said his bookkeeper had been stealing money from him for the last two years in the form of checks forged on his account. The checks, payable to our bank, were brought in and cashed by the bookkeeper. When we asked him why it took two years for him to catch this, he told us it was because she had total control-writing, settling, etc. on this account. His auditor took care of all his other business accounts, but not this one. The total of the checks over the two years is close to $6,000. Are we liable for all this?
Answer: The revised Uniform Commercial Code has been ratified in your state, as it has in all but two states at this date. The revised UCC says consideration can be given to negligence on the part of the customer. And that's what I'd claim in your case. It should not have taken two years for them to discover this. We're assuming, of course, that the customer has filed a criminal complaint with the police and is going to prosecute the bookkeeper. That's the first order of the day.
However, the fact the checks were payable to your bank, and not to the bookkeeper raises a question. Your teller should not have cashed checks payable in this manner. Checks payable to your financial institution should only be accepted for loan payments, mortgage payments, etc., where the funds are actually going from the depositor's account to the bank's account. That could have caused you some problems.
Copyright © 1996 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 6, No. 12, 11/96
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