Refer to Maker Revisited
Barb Hurst, BOL Guru Guru Bio
Editor's Note: A Q&A we featured last week about the use of the phrase "Refer to Maker" raised some questions about whether it is an appropriate reason for a check return, in light of the provisions of Regulation CC. We asked BOL Guru Barbara Hurst to expand on her answer a little further.
I agree that CC specifies that the reason for return is required. And perhaps I was too audacious in mentioning the fact that "Refer to Maker" is a handy reason. But I'm speaking from working in Operations for fifteen years and not only using it for a reason, but also having to deal with it on returned checks.
When testifying for a bank that has been stuck with a check marked that way, I've had to explain to the court just what it means, and why the bank that marked the check that way thought it a legitimate reason. On the face of it, dealing with the
words themselves means this check is no good and you'll have to find the maker to determine why it's no good. In banking language, however, it means this check is 99% sure to be a fraud, but the bank can't say so. NSF on the check can be disproven if the records show a good balance - but the officer knows the balance is false, and fraudulently inflated. So I can't put NSF on it. The signature agrees. "Funds subject to hold" means I better have some documentation to back me up. However, I may be taking action on nothing but a phone call And I'm in even more trouble if I put "suspected fraud" on the face of the check. So the catch-all - used by almost all financial
institutions (particularly the very large ones) is "Refer to Maker".
If you can't find a good, standard reason to put on the check as the reason for return, and the reason you are returning it puts even more liability on the bank, then "Refer to Maker" is your answer.
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