Time Frame To Contest Preauthorized Check?
Answer by John Burnett, BOL Guru Guru Bio
Question: What is the time frame for a customer to contest a preauthorized check (actual paper check presented without signature?)
Answer: While the bank has only until the day after presentment to return such an item as "unauthorized" (except in states with special UCC provisions -- currently TX and CA, I believe), the customer on whose account they are drawn has to comply with UCC §4-406. In general, the customer has 30 days from the date the related bank statement was made available to claim unauthorized signature (which would include an unauthorized draft). There may be some allocation of loss if the customer proves the bank failed to use ordinary care in paying the item and the failure substantially contributed to the loss.
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