Tell us
what you think
Our Sponsors
 |
Our Sponsors
|
Question & Answer
Question: I just had a customer come in with a check out of his December, 1997 statement that he says his brother never got. As a matter of fact, there is a different name than that of the payee as the endorser of the check. But we have written right on our deposit agreement that you have to examine your checks and statement within 14 days of receiving it. Do we still have liability on this check?
Answer: That depends on whether or not your financial institution is the one that negotiated it for whoever's name is on the back of the check. The 14 days you're talking about refers to the maker of the check - not the endorser. The Uniform Commercial Code says the endorsing bank is still liable for three years after the negotiation of the check. You'll need to get a forgery affidavit from the brother, send the affidavit and the original check by mail (without entry) back to the negotiating bank, (whose name will appear on the back of the check) and tell that bank you want reimbursement for the forged check. You should get your customer's money back in short order.
Now, of course, if that "endorsing bank" happens to be you…you may have just been hit with a loss. You guaranteed your customer that the payee (his brother) got the funds in the check. Now turn investigator. You'll want to talk to the brother to see if he knows the name on the back. He may have some knowledge about the check's negotiation and his story may make you want to take a harder stance than "roll-over-play-dead" on paying the claim. Ask questions.
Copyright © 1998 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 8, No. 10, 9/98
Rate This Article
Current Rating For the Feature:
| Total Ratings for this Feature: 0 |
|