If a customer notifies the financial institution that someone has stolen and written checks against their account, then how can the financial institution make a claim against the financial institution that cashed the fraudulent checks in order to remburse the customer? I remember that based on Check21 that the entity that cached the check was liable but I do not know the means for obtaining the reimbursement. Does anyone know the UCC citation for how to handle this?

Thanks

The account holding bank is liable for a forged maker's signature as it would be the bank that could verify the maker's signature with the signature card. THe depository bank (bank that cashed the check)would only be responsible for a forged endorsement.