Fraudulent Item Return Deadline
Question: How long does a drawn-on bank have to "return" (thru Fed Cash Letter) a fraudulent forged signature check? We are receiving old, high-dollar checks back through the work instead of 'without entry' and also without high dollar notice and the drawn-on bank is saying they have one year to "return" the checks. We haven't heard of that or found it yet in the reg.
Answer: Wow! Your "drawn-on bank" is writing some of their own new rules. And they evidently have confused some of the facts. Their own customer has a year to make a claim on them for a forged signature on a check on their account. But any checks coming from that bank returned to you, for ANY reason, are held to the 'midnight-of-the-day- following-receipt' deadline. Refuse the returns, and send regrets. No wonder you couldn't find it in the regs!
Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 7, 7/05
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