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#1526159 - 03/23/11 09:24 PM Refer to Maker
Lu Offline
Platinum Poster
Joined: Apr 2002
Posts: 597
We have been receiving several return deposited items as “refer to maker”. This does not give us any information as to the real reason why these items are returned. Can an item returned as “refer to maker” be rerun or represented to the paying bank?
"If you only laugh and enjoy life when your problems are all solved, you'll never enjoy life."

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Operations Compliance
#1527062 - 03/25/11 03:00 PM Re: Refer to Maker Lu
dickr Offline
Gold Star
Joined: Feb 2010
Posts: 356
Middlesex Cty NJ
My experience has been that 'Refer to Maker' usually covers the 'oops' situations where the paying bank doesn't have a valid reason but wants to 'unpay' the check ( late return - sometimes a 'kite'). The hope is that the item will be re-deposited without question, which eliminates any late return claim and allows the paying bank a second shot at returning it as NSF or Uncollected.

Before you re-deposit, I would verify that the return is timely and take a closer look at your customer's account.
Lord,give me patience - and I want it NOW!!!

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#1527218 - 03/25/11 05:59 PM Re: Refer to Maker dickr
madukes Offline
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Joined: Jul 2009
Posts: 1,465
Flyers Country
we don't allow redeposit on "refer to maker" returns. We tell our customers to go back to the maker and get a new check. Redeposits are only permitted on NSF or uncollected items.

In our positive pay system a customer can mark an item as void before it is presented for payment (i.e. maybe it is beyond the "pay within" date range). In any event when these items are presented for payment they are returned as "refer to maker". of course other items are returned as refer to maker for different circumstances, this is just one example of when we use refer to maker.
Last edited by madukes; 03/25/11 06:01 PM.
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#1527245 - 03/25/11 06:30 PM Re: Refer to Maker Lu
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
I'm willing to characterize "refer to maker" as fundamentally dishonest; any bank returning a check knows exactly why they are returning it. They just don't intend to tell you (your customer) because, in all likelihood they have messed up and want someone else to pick up the tab.

Unfortunately, "dishonest" falls short of illegal. From the Commentary to Regulation CC:

1. The reason for the return must be clearly indicated. A check is identified as a returned check if the front of that check indicates the reason for return, even though it does not specifically state that the check is a returned check. A reason such as “Refer to Maker” is permissible in appropriate cases.

There is no way I would accept it for redeposit. However, unless they hit the midnight deadline square, I would protest it as a late return wherever feasible. Life is a two way street.

I forgot to mention my favorite example from last week. A bank returned a its own cashiers check "refer to maker." Duh, I wonder who they think "the maker" of their cashiers check is?

Last edited by Ken_Pegasus; 03/28/11 01:58 AM.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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#1527502 - 03/28/11 01:26 PM Re: Refer to Maker Elwood P. Dowd
A_G Offline
10K Club
Joined: Jul 2004
Posts: 18,989
I used to remember seeing a stamp around here that said "if unpaid due to lack of signature, please refer to maker" or something like that. Not sure what purpose that ever served?
With the lights out, it's less dangerous.

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#1527505 - 03/28/11 01:35 PM Re: Refer to Maker A_G
Bob The Banker Offline
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Bob The Banker
Joined: May 2010
Posts: 958
Instruct the customer to cash it at the issuing bank.

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#1527823 - 03/28/11 08:04 PM Re: Refer to Maker Bob The Banker
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
It’s interesting that The Fed is proposing to eliminate current commentary to section 229.30(d) that recognizes “refer to maker” as a permissible reason for return. The Fed now does not believe that “refer to maker” is an appropriate reason, by itself, for return. They call it an instruction rather than a reason for return. Then the Board goes on to request comment on whether there are cicrcumstances in which is is appropriate to use only “refer to maker” when returning a check.

Source: Proposed rule to amend Regulation CC, 76 FR 16877, 3/25/11)
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8

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#1527836 - 03/28/11 08:25 PM Re: Refer to Maker John Burnett
Pup Offline
Power Poster
Joined: Sep 2003
Posts: 5,045
Pedaling along a scenic highwa...
I've always thought it should be the paying bank's duty to "refer to maker". If there is a suspicion based on a signature, use "Irregular Signature" if you can't reach your customer. If it's a forgery, have an affidavit ready and use "Forged Signature". If it's counterfeit, use "Altered/Fictitious", neither of which really means counterfeit, but that's another story.

Refer to Maker is a copout, and I agree that it should never be used.

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#1527853 - 03/28/11 08:44 PM Re: Refer to Maker Pup
M Cockrell Offline
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M Cockrell
Joined: Jan 2003
Posts: 1,049
Dallas, TX
I may be wrong, but in cases of lost/stolen check books, if our customer did not provide us with an accurate list of outstanding item(s), and we are/were unable to verify the authenticity, we return(ed) it as "Refer To Maker."

If it's a legitimate item, it's easily explained and the payee can obtain a replacement check from the payor.
"Remember no man is a failure who has friends." - Clarence (the Angel) Oddbody - It's a Wonderful Life

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#1527887 - 03/28/11 10:05 PM Re: Refer to Maker M Cockrell
Pup Offline
Power Poster
Joined: Sep 2003
Posts: 5,045
Pedaling along a scenic highwa...
MC, we close those accounts and return the checks, if not listed to be paid on the new account, as "Account Closed".

Another option if for Stop Payments to be placed on missing checks if the customer wants to keep the account open.

It's easily explained, but it's not easy to get recovered, especially if either the maker or the payee have financial problems and are in no hurry to make the BOFD whole.

If the signature is good, pay the check. If it is not what it should be, it should be returned "Irregular Signature".

Just my opinion.

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