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No Notice was Given on Large Item Return
by John Burnett, BOL Guru
Guru Bio
Question: Regarding Reg CC Sec. 229.33 notice of nonpayment, if a paying bank determines not to pay a check in the amount of $2500 or more and does not provide notice of nonpayment and the check is lost in route, does the receiving bank have recourse? We did not receive notification about a large item return and we returned the item as a late claim. The paying bank provided a late claim response proving the item left their bank timely. We were then charged for the item. Is that all the paying bank has to do or can they be held accountable for not sending a large item return notice?
Answer: If the failure to provide the large item return notice caused your bank a loss that it would not have suffered had the notice been received on time, you have a warranty claim for the amount of that increased loss plus perhaps the related interest and expenses. Make your statement of claim quickly (directly to the other bank). You have a 30-day deadline from the time you realized the other bank's inaction caused you a loss.
First published on BankersOnline.com 5/05/08
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