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Reg CC Charge Back Rights Disclosures
Ken Golliher and John Burnett, BOL Gurus
Guru Bios
Question: With this amendment for Reg CC coming up July '06, should we send notice to our existing customers about our charge back rights under the Warranty and Indemnity Claim for remotely created checks?
Answer by Ken Gollliher: The amendment regarding remotely created checks does not give your bank any new charge back rights against the customer that deposited the item. The new warranties are only between banks. If you want your legal relationship with the customer to give you specific charge back rights in connection with these items you will need to amend your contract with your customer.
Answer by John Burnett: One way to amend that contract is to require that customers whom you identify as depositors of RCCs sign a "side agreement" that allows the bank to recover from the depositor for warranty claims it has paid. You should consider refusing to accept RCCs unless the depositor agrees to the side agreement.
First published on BankersOnline.com 8/28/06
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