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Question & Answer
Question: We had a customer who had two checks stolen from his car about four years ago. Because it was only two checks, and it is a very large, very active business account, we put stop payments on the checks and left the account open. One of the checks showed up in his last statement with a forged signature on it. Are we still liable? The check was stolen four years ago!
Answer: It actually makes no difference when the check was stolen. The liability is yours because of when the check was negotiated. You indicated in our conversation that it was really your decision not to close the account - it made no difference to the customer if you did or didn't. Therefore, you can't even hint that the check was paid because of any negligence on his part. Because it was a large check, however, (over $5,000) I would be sure to ask your customer a lot of questions about the theft, the payee, and any information he may have about the transaction. Also, it might be a prudent thing to put another stop on that other stolen check if you're going to leave the account open now.
Personally, I'd want it closed.
Copyright © 1999 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 9, No. 6, 7/99
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