There seems to be some confusion on what an actual altered check is at our branch. Could someone please give me a definition and the laws concerning this? I cant seem to find a procedure within our policies. Also, it is anything on the check that is considered altered???? Any help will be appreciated.....

If your state has adopted the standard Uniform Commercial Code...here is Section 3-407

§ 3-407. ALTERATION.

(a) "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.

(b) Except as provided in subsection (c), an alteration fraudulently made discharges a party whose obligation is affected by the alteration unless that party assents or is precluded from asserting the alteration. No other alteration discharges a party, and the instrument may be enforced according to its original terms.

(c) A payor bank or drawee paying a fraudulently altered instrument or a person taking it for value, in good faith and without notice of the alteration, may enforce rights with respect to the instrument (i) according to its original terms, or (ii) in the case of an incomplete instrument altered by unauthorized completion, according to its terms as completed.



Basically, if a teller accepts an altered check (whether it is the payee or dollar amount) for cash or deposit, the drawee bank can make a warrenty claim against your bank and you will have to try and collect from your customer.

There's no black and white to accepting or refusing an altered check. That is a risk based decision you have to make for your institution.

Thank you crowman3 this has been very helpful....I just love bankersonline!!!!!!

We received a check back today stamped Altered/Fictitious. It appears to have been returned within the midnight deadline. If it's a counterfeit check, would we have any recourse due to the return reason? Could we request the affidavit of alteration or are we just stuck collecting from our customer?

Stuck collecting from your customer.

There's no affidavit required for the bank to return the check within the midnight deadline. The bank uses the terms "altered/fictitious" a little brashly, I suppose, unless it's clear from the bank's own records that there's something rotten about the check. For example, if a business provides an enhanced checks issued list to the bank (with payee information) and the payee name or dollar amount of the presented check doesn't agree with the information from the business, it's a better than even chance there's been an alteration.

The majority of checks I see returned as "altered/fictious" are related to foreign lottery, secret shopping, international payment processing, online auction overpayment, catch all anything I've missed, scams. Usually in these cases the fraudsters have send out several similar checks with only the payees' names changed. To the other bank these are so clearly fake, they are not going to bother making their custoemr sign affidavits for all of these items. As John pointed out, they're simply returning them within the midnight deadline.