Click to return to BOL home page
Banker Store Read A Reg BOL Insiders Career Connect Learning Connect Bankers Information Network

Search BankersOnline
using Google









Alphabet Soup


Banker Store

Bankers Info Ntwk


Career Connect

Learning Connect

Guru Central


Ask a Guru

Bankers Threads

Contact Us

Give Us Feedback


About Our Sponsors

About Us

Print Friendly! Email This Article! Discuss NOW!

Statute of Limitation for Submitting Forgery Claim
Answer by John Burnett, BOL Guru
Guru Bio

Question:  What is the statute of limitations in each state for someone to submit a forged endorsement claim (ucc 4-406)?

Answer:  UCC section 4-406 addresses a depositor's responsibility to verify an account and statement for unauthorized items and alterations. It doesn't address forged endorsements.

Forged endorsement claims are started by the legitimate payee of a check, who provides an affidavit that the payee did not endorse the check and did not obtain any benefit from it. That affidavit is given to the remitter/drawer of the check as part of a claim of non-payment. The drawer of the check then looks to the paying bank under a claim that the payment of the check was improper due to the forgery.

The forged endorsement is then used as the basis for the paying bank's claim against the depositary bank or a collecting bank under the transfer and presentment warranties in UCC 4-207 and 4-208. Each party that learns of a breach of warranty under those section has thirty days from the date it has knowledge of the breach, and the identity of the warrantor (whom to file the claim against), to file a notice of the claim or the warrantor is discharged from liability to the extent of the warrantor's loss attributable to the delay in notice.

The statute of limitations for filing an action for recovery under a warranty in Article 4 varies from state to state. The model statute puts the deadline at three years from when the cause of action (the breach of warranty) accrues. In some states, notably Florida and Georgia, the period is one year.

First published on 9/06/10

Privacy Policy    Disclaimer   Recommend This Site !   Contact Us

BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.