Affidavit of Forgery- Credit Account Immediately?
Answer by Ken Golliher, BOL Guru Guru Bio
Question: Once our customer signs an Affidavit of Forgery for a forgery item (regardless of being with the 24 hr return window) are we required to credit their account immediately or can we attempt to return and credit if and when we receive funds?
Answer: Regulation E sets explicit time frames for investigating and correcting errors in connection with electronic funds transfers. However, that's because Regulation E's primary purpose is consumer protection.
Check handling is governed by the Uniform Commercial Code as enacted in your state. It is not a consumer protection law and does not contain explicit time frames in which every action must be taken by the drawee bank in connection with a forged drawer's signature. However, it does require your bank to be fair and act in good faith.
If you are meeting the midnight deadline in returning an item as a forged drawer's signature the account should be recredited immediately. If the item is being returned under other circumstances, there is a wide array of possibilities and, in some of them, you might reasonably delay recrediting the account. You would need an explanation other than fiat.
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