Question: We were having a discussion on the upcoming "Check 21" and the question was asked, what happens if all we'll have are images, and a check is written with one of the gel inks or fluorescent inks and doesn't image, and gets through the system. The customer claims forgery, but we can't really see what was written on the check. Will, in your opinion, the liability fall back on the paying bank or bank of first deposit? Will the account holder be able to file a forgery affidavit without being able to "prove" what was written?
Answer: That must have been an interesting discussion! If you take into consideration the Revised Uniform Commercial Code's stated intent that liability in the case of fraud should be assumed by the party in the best position to prevent the loss, you can pretty well imagine the person who has a chance to eye-ball the check at the moment of negotiation would be that 'party.' That's about the only chance there is to stop the negotiation and subsequent loss. In most cases that would be the teller who accepts the check for payment. All this is an opinion - who knows how it will shake out! See the next question.
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