Transfer Warranties

Question: What is the bank's responsibility (versus a customer's) for a counterfeit cashier's check, versus a counterfeit US Postal MO versus a counterfeit personal check? I have read and researched the UCC but cannot find what I believe to be a clear answer.

Answer: The UCC includes transfer warranties, which are made whenever a person endorses and transfers a check or money order. The warranty is the same for each of the items you've listed in your question. It warrants that the endorser will make good on the item if it's dishonored. The specific language can be found in UCC 4-207(b) . (Thanks to John Burnett, BOL Guru)

Copyright © 2005 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 15, No. 2, 4/05