Fraudulent Checks

Question: A bank can't help a customer who won't help himself. If the customer gave out his account number over the telephone, he has at that point authorized payment of the check, according to the UCC.

Answer: Unfortunately, any checks that come in as the result of his sharing the information on his account are not fraudulent - they are authorized. The only remedy is to do two things. Close the account and open a new one. Then warn your customer he or she is NEVER to give out the number!

I would caution you to think carefully about restoring the customer's funds at a loss to your financial institution, as you may be setting a precedent you could regret.

Copyright © 2001 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 11, No. 11, 11/01