A customer made an ATM deposit with what we believe is an altered check. It looks like the check was made out for $75.00 and altered to read $750.00. We still have the check and the money has been posted to the customer's account. What should we do? Should we debit the customer's account and send the check back to the originating bank?

If you truly believe that the check was altered, and still have the check, you need to quickly either put the check into the clearing process or reverse the deposit out of your customer's account and inform the customer, as quickly as you can (phone call or email followed by a letter?) that you're refusing the deposit because the check appears to have been altered.

If the check is your customer's, drawn on the other bank, you're likely to get some push-back like "I made a mistake when I made out the check and I can correct mistakes like that myself, can't I?" Your response ought to be something like, "We can't be certain that your other bank will honor the check if it sees the changes you made, so why don't you just give us another check so we can process your deposit without further delay?"

If it's not your customer's check, your customer may protest, but you do have the final say on whether the check gets accepted for deposit, and "our policy is not to accept altered checks for deposit to customer accounts."

I don't advocate sending the check to the drawee bank if you're going to reverse out the deposit.

So if we decide to reverse out the deposit what do we do with the check? Sorry for sounding so ignorant, but we haven't come across this type of situation before.

You return the check to your customer who can then take it back to the issuer for an unaltered replacement.

It's okay to give the customer back the check, when we believe it was that person who altered it? To me, it looks like the customer is committing fraud . . . shouldn't more be done?

If it is a business check, is there a phone #? can you contact the maker and verify the check?

We've found out about some fraudulent items this way (other bank calls our customer regarding a check they took for deposit, our customer informs them the item is bogus - hopefully our customer then tells us about it). We had one case were our customer never told us. We found out months later that the other bank was holding the money waiting for us to claim it!

Sounds difficult to alter the check the way described. $75.00 to $750.00 is easy for the numerical value in the upper right, but on the legal line that is extremely difficult. You would have to practically erase what was written and re-write it:

Seventy Five ------------- Dollars
Seven Hundred Fifty ------ Dollars

It would be more believable if it were altered to $7,500.00

Seventy Five ------------- Dollars
Seventy Five Hundred ----- Dollars

--------------

I would call the check writer as another poster mentioned. Just may be the writer forgot a zero in the upper right and added it in.

You can clearly see where the "ty" in seventy was scratched out/crossed off and then fifty was changed to five. We believe the person altering the check is the son of the maker.

Sorry for the questioning, but how does he signify hundred between seven and five? Did he re-word it to say Seven Five Zero?? I would definately contact the check writer, and not to ask them if you should pay it, but inform them it is not being paid and explaining the fraud/alteration.

Intriguing questions, all. But the bottom line is you don't want to accept the check for deposit. Reverse the deposit, notify your customer, and, if you don't trust him, kick his account out of your bank.

If you accept a check for deposit and at a later time the same day learn that the check is fraudulent or will not be paid for some other reason, can you reverse the deposit and send the check back to the customer of course trying to notify them at the time of reversal?

If you can do this and the check is not processed and not returned with a reason for non-payment, what recourse does the customer have based on a verbal notice from a bank that a check is not payable?

Absolutely reverse the deposit. There is no reason to submit an item that you know will not clear. The customer's recourse is to go back to the person who gave them the check and state that their bank will not accept it for deposit and ask for cash.

Thanks so much, Brian....