It has been my understanding that a bank has up to a year to return items in the event the item is altered or the endorsement forged. I have another
bank stating that the midnight deadline applies. Could you please provide clarification. I am located in Florida.
My customer mailed a check to their employee. The employee had moved and someone else cashed the check. My customer gave their employee the money for the stolen check. My customer wants the bank to credit his account and return the check because of the forged endorsement on the back of the check. This took place over 4 weeks ago. It is my understanding the check can be returned up to 36 months later when dealing with forged endorsements of the payee. Is this correct?
What is the statute of limitations in each state for someone to submit a forged endorsement claim (ucc 4-406)?
To reassure my superiors, please clarify the information on your article in Bankers' Hotline<a href="http://www.bankersonline.com/articles/bhv11n07/bhv11n07a18.html">Volume XI, Number 7 </a>in the Q&A section. You are stating that the liability for forged endorsements falls on the depository bank. We have been physically reviewing endorsements on checks over $750.00. This policy has been in effect for some time. Would it be OK for us to change our "written" policy to not include reviewing the incoming checks?
Drawee Bank Not Required to Examine Checks for Forged Endorsements
By Craig W. Smith, J.D., Author, CCH DEPOSIT LAW NOTES.
We frequently have customers who wait 6 months to report forgeries. Our procedure has been to return the item at that time to the depositary bank. (We normally give the customer a refund) It is my understanding that we must return items according to Reg. CC, and this is much too late. Please tell me what we should be doing when this happens? I am new to compliance, but this does not seem like the correct way to handle forgeries. Our deposit agreement states that the customer should examine their statement within 30 days. I know that the customer has one year to report a forgery and three years to report a forged endorsement.