We have a check that cleared from a members account last month. The check is not made payable to anybody and it was written in July of last year. The member did endorse the check but is now saying she never wrote it.

I wanted to know who is liable for this? I would assume it would be the account holder. The depositing bank took it and since it was endorsed by thier account holder, I imagine it would be considered properly payable.

Does our account holder still have 90 days to return or reject the charge?

By the way, I know a check is properly payable if the payee is blank. I am just curious as to whether or not the account holder can still deny the charge and have us file a forgery or something to that effect.

UCC article 4 states that

"the fact that a check is deposited more
than six months after the date on the check
(i.e. a stale check) is a reasonable indication
that the check may be uncollectible, because
under U.C.C. 4–404 a bank has no duty to its
customer to pay a check that is more than
six months old."

Well, the depositor bank did accept the check.

Can we reject it if it's stale dated?
Can we reject it even though it posted to the account over a month ago?

You would only have up until your midnight deadline to return the item as stale dated so that idea won't help you. The depository bank would have no liability since a blank payee line essentially turns the item into a bearer instrument. The UCC allows an account holder up to 1 year to claim forgery from the date an item cleared the account, although some contracts reduce this timeframe.

The question boils down to, did your customer sign the check or is it a forgery? If you determine that it is not a forgery in spite of the claim, then you deny the claim. (The customer has the right to file suit for damages, bring in the handwritting experts, etc.) If you determine that the signature of the front of the check is, in fact, a forgery, then you reimburse the member for honoring a check that was not properly payable.

Thanks. No that I have received a copy of the check, the endorsement on the back is blank. Once presented with a copy, the member states she did write the check, just didn't know to whom.