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Documenting an Applicant's Intent to be a Joint Applicant;
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MLO v LO - Who Has to Do What?;
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November 18
Understanding USPAP and Regulatory Guidelines for Appraisal and Evaluation Compliance Reviews;
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#1680609 - 03/21/12 03:38 PM Forged/Missing Endorsement or Altered Checks
Investigator1 Offline
New Poster

Registered: 03/23/11
Posts: 3
Loc: Houston, TX
How is eveyone else handling these types of fraud claims when made by the client? My bank has had numerous compliants regarding the handling of these claims. We typically do not provide the client with provisional credit at that time. We send the depositing bank a collection letter along with the affidavit and certified check copy where the process can take up to 90 days to receive a response. Our disclosure does not address timeframes and I was not able to locate a Reg regarding timeframes either. Is the 90 day turnaround time industry standard? Please help.


Edited by Investigator1 (03/21/12 03:45 PM)

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Security - Public
#1681018 - 03/22/12 12:12 PM Re: Forged/Missing Endorsement or Altered Checks [Re: Investigator1]
MidwestCFE Offline
Gold Star

Registered: 01/21/03
Posts: 465
Loc: wish it was the Smoky Mountain...
I think you have a couple of questions going on, so hopefully I address them properly.
Provisional credit for check claims-no, we provide none.Never heard of an industry standard & I've been doing this 20 yrs. Have had too many times the depositing bank came with a denial reason.
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My opinions...you get what you paid for..


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#1681039 - 03/22/12 12:37 PM Re: Forged/Missing Endorsement or Altered Checks [Re: Investigator1]
Pup Offline
Power Poster

Registered: 09/19/03
Posts: 5045
Loc: Pedaling along a scenic highwa...
Ditto Midwest.

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#1681415 - 03/23/12 09:39 AM Re: Forged/Missing Endorsement or Altered Checks [Re: Investigator1]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2896
Loc: Illinois
The claims are handled according to your state's version of the Uniform Commercial Code. In the model form, there is no prescribed time limt for honoring a claim. Consequently, the bank against which you have a claim does not have a time limit, either. If your customer feels the claim is taking too long, or if you feel that the BOFD is taking too long. Either of you would have the right to file suit for breach of warranty under the UCC. Knowing how fast the court system moves, and how expensive it could be over a dollar amount that may only be in the hundreds, it's usually a better idea to just wait it out.
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I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1687195 - 04/10/12 08:12 AM Re: Forged/Missing Endorsement or Altered Checks [Re: BrianC]
threereds Offline
100 Club

Registered: 11/21/02
Posts: 112
Loc: Western New York State
If the other bank refuses to honor the claim, and we file suit for breach of warranty, at what point are we actually required to give the customer back the money? We had a case like this recently and our attorney advised us that either way we had to give the customer back the money so we dropped the suit after $3,000 worth of legal fees. We tried to charge the customer for the fees - didn't work.

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#1687241 - 04/10/12 10:05 AM Re: Forged/Missing Endorsement or Altered Checks [Re: Investigator1]
BrianC Online
Power Poster

Registered: 11/26/04
Posts: 2896
Loc: Illinois
The UCC is silent on when you are required to credit the customer. If the customer decided that you're taking too long to honor their claim, they may opt to file suit against you. The customer has a claim against you, and you have a claim against the BOFD. Collecting on those claims is another matter.
_________________________
I can do all things through Him who gives me strength. (Phillipians 4:13)

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#1731291 - 08/15/12 02:21 PM Re: Forged/Missing Endorsement or Altered Checks [Re: Investigator1]
madukes Offline
Diamond Poster

Registered: 07/17/09
Posts: 1173
Loc: Flyers Country
We never give provisional credit for forged endorsement claims - sometimes the payee DID get the money.

Provisional credit for forged sig/counterfeit check? they are decided on a case by case basis depending upon age of the item, amount, circumstances, etc.

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