We have a business customer who wrote a check and the person said he never received the money. Our customer indicates that the person never received the money (payee), however, there is an endorsement on the check.

We can obtain an Affidavit of Forgery from the payee. What else do we need to do? Any help would be appreciated. Thanks

Your depositor asks you for reimbursement for the check because, with the forged endorsement, it was not properly payable. You in turn enter a claim with the depositary bank, based on that bank's transfer warranties under the UCC.

Then you wait for the depositary bank to figure out that it actually owes you the money. If the check is relatively small, be prepared to be ignored (some banks have taken this approach, even though it means they are reneging on the warranty). The depositary bank may bet that you won't spend on a lawsuit for a small potatoes check. Be prepared to consider calling in an attorney if the dollars are worth it, particularly if you're headed over state lines with your claim.

In the meantime, you may decide to reimburse your customer before getting the funds from the depositary bank.

Thanks, John

These checks are big potatoes...totaling $100,000.00