Counterfeit Check Reimbursement
by Ken Golliher, BOL Guru Guru Bios
QUESTION: A commercial customer of ours discovered a counterfeit check in their statement and we sent it back to the bank
that deposited it within 30 days. The depository bank is refusing to charge their customers account for it because it is over 24 hours later. We sent it back refer to maker in lieu of original. This item is not only a forged signature, which in my understanding we have a year to return, it is also a counterfeit. Do we have a right to return this item? Should the depository bank charge the account that it was deposited in?
ANSWER: Counterfeit checks are evaluated like checks bearing a forged drawer's signature. If they are not returned by midnight of the banking day following the banking day of presentment, the risk of loss falls on the drawee (paying)
bank. The theory is that only the drawee bank had a signature it could have used for comparison; the drawee bank was in the best position to prevent the loss.
The drawee bank's customer has up to a year to assert the forgery against the drawee bank.
If the depositary bank had accepted the return of the check, its customer could have asserted the late return against it.
On a side issue, Regulation CC requires a bank returning a check to give a reason for return. "Refer to maker" is not a reason. With a customer affidavit on file, it is appropriate to say "Counterfeit."
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