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#95431 - 07/09/03 01:00 PM Bogus checks and return deadlines
RR Joker Offline
10K Club
RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
Okay for you ops guru's out there...we are receiving a lot of bogus checks whereby our customers account numbers and correct routing numbers are used, but the name and address is fake. These don't reject because the numbers are "legit"...what recourse or timeline do we have...is it a midnight deadline? We usually are not aware of this until a customer brings them in after they receive their statement due to the generally small size of the checks.
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Operations Compliance
#95432 - 07/09/03 01:40 PM Re: Bogus checks and return deadlines
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
Midnight deadline is correct. These fall under the forged/unauthorized item timeframes. If your losses are adding up as a result of these items, you may want to tighten the amount of time your customers have to review their statements and report unauthorized items to reign in some of your losses.

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#95433 - 07/09/03 03:32 PM Re: Bogus checks and return deadlines
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
As much of a hassle as it is, you should consider working with your affected customers to close their accounts and reopen new ones. Also, a forensic study of affected accounts might find a common thread -- a check payee in common where account information might have been compromised. If you bring someone in to do this, get your customer's approval to review account records with the third party.
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BankersOnline.com
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#95434 - 08/04/03 07:00 PM Re: Bogus checks and return deadlines
Anonymous
Unregistered

Is the timeline we give our customers in our Terms and Conditions brochure (to review their monthly statement) simply a contract issue OR is there
a statute or reg that can back this up?

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#95435 - 08/04/03 07:14 PM Re: Bogus checks and return deadlines
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Readers, please note the topical turn - this is the customer side of the issue discussed above

Section 4-406 of the UCC addresses the issue. Subparagraph (f) provides that a customer has one year from the time a statement was made available to draw an altered or forged instrument to the bank's attention. However, if there is a series of alterations or forgeries by the same wrongdoer, subparagraph (d)(2) shortens the notification period to 30 days.

Banks routinely shorten the one year period to 60 days using contract language.
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