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#1576947 - 07/12/11 07:30 PM Check Deposited by Wrong Payee
Fl Banker Offline
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Joined: Nov 2008
Posts: 15
Florida
Forgive me if this has been posted before, not good with the search function.

I have a customer who wrote two check to a business which claims it never received the checks.
Both checks cleared the bank on June 2, 2011.
How do I go about collecting the funds from the BOFD? Do I return them through Fed stamped with endorsement irregular, forged or altered, etc. or do I have to file something directly with the BOFD? Unfortunately for me, I have never had to deal with this before in our small community bank world and I am now lost!
Thank you in advance for your help with this.

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#1576958 - 07/12/11 07:43 PM Re: Check Deposited by Wrong Payee Fl Banker
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,365
Illinois
The Fed will only allow you to return an item by your midnight deadline, so you'll be dealing with the bank of first deposit by making a warranty claim without entry.
Forged Endorsement - Course of Action
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#1576968 - 07/12/11 07:53 PM Re: Check Deposited by Wrong Payee Fl Banker
John Burnett Online
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John Burnett
Joined: Oct 2000
Posts: 39,793
Cape Cod
I'm sure that you're already past your bank's midnight deadline for returning the checks, so don't even consider it.

First, you need affidavits by the payees of the checks to the effect that they did not receive, endorse, deposit or obtain the benefit of funds from the checks. It's your customer's job to get those affidavits for you from his payees, since they become the basis of your customer's claim for reimbursement from you.

You take each check and send it with its affidavit to the depositary bank directly, without entry. You include a cover letter explaining that you're entering a claim under the depositary bank's transfer and presentment warranties of the endorsements under the UCC.

If the depositary bank accepts your claim, it will send you a cashier's check to satisfy the claim.
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#1576998 - 07/12/11 08:12 PM Re: Check Deposited by Wrong Payee John Burnett
Fl Banker Offline
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Joined: Nov 2008
Posts: 15
Florida
Thank you very much for your help. This of course all sounds like a foreign language to me but it's great to learn something new! I have sent our customer the affidavit to get their customer to sign and will proceed from there. I guess now I need to figure out what to send to the BOFD since we are an imagined bank and can only print out an image of the checks. Sigh...
Thank you again!!

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#1577002 - 07/12/11 08:14 PM Re: Check Deposited by Wrong Payee Fl Banker
John Burnett Online
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John Burnett
Joined: Oct 2000
Posts: 39,793
Cape Cod
Forgive me, Fl Banker, but I hope you meant "imaged" rather than "imagined." I "imagine" that your customers consider your bank very REAL!
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#1577007 - 07/12/11 08:17 PM Re: Check Deposited by Wrong Payee John Burnett
Fl Banker Offline
New Poster
Joined: Nov 2008
Posts: 15
Florida
Oh my!! MY brain is fried! Yes, yes, we are imaged; I am only imagining that I was somewhere else!!
Thank you again John for your help!

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#1578154 - 07/14/11 06:29 PM Re: Check Deposited by Wrong Payee Fl Banker
Ric30 Offline
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Joined: Apr 2005
Posts: 186
IN
I always send an indemnified copy of the check along with the original affidavit and letter stating my reason.
Last edited by Ric30; 07/14/11 06:29 PM.
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#1580482 - 07/20/11 05:40 PM Re: Check Deposited by Wrong Payee Ric30
madukes Offline
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madukes
Joined: Jul 2009
Posts: 1,448
Flyers Country
Originally Posted By: Ric30
I always send an indemnified copy of the check along with the original affidavit and letter stating my reason.


Same here. I send a indemnified copy of the check, the original affidavit and a cover letter so they know what we are requesting and where to send the cashier's check (which would be back to you). You do not give your customer provisional credit for these items - their account will be credited back when you receive the cashier's checks and deposit them to your customer's account (I have had cases where the payee actually did get the money but lost track of it). Make sure you keep a copy of the letter, affidavit and check - chances are you may need to send a follow up request.

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#1580496 - 07/20/11 05:45 PM Re: Check Deposited by Wrong Payee madukes
Fl Banker Offline
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Joined: Nov 2008
Posts: 15
Florida
Thank you all for the great information.

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