customer had a check pay twice from their account - May and June of 2012. They just now brought it to our attention. The fed will not handle because of the age of the item so we must deal direct with the 2nd depositing bank.

Do we have to credit our customer now, or can we wait until we are actually paid for the duplicate based on the time that passed before the customer notified us of the error. Our account agreement states they need to notify us of a discrepancy within 30 days of the statement date.

thank you!

There's no time constraint built into the UCC when it comes to this type of adjustment.

You may get lucky and be dealing with a depositary institution that will not question the claim and simply send you the funds. But I would not make that assumption. For something this old, the depositary institution might wonder whether you actually had to pay your customer at all. A lot of banks have contractual provisions requiring customers to call unauthorized or altered items to the bank's attention within 6 months of the statement showing the item, or 90 days, or even less. If you have one of those provisions, and if your customer missed the notice deadline, you'd be correct to simply deny (regretfully, of course) the claim. And the depositary bank would be correct to refuse your claim if it can show that you should not pay your customer.

On the other hand, if you don't have such contractual language, the default time period in the UCC in most states is one year, and your customer fits quite easily into that. You'll owe your customer the money for the duplicate payment whether or not you are able to recover from the other bank, so why make your customer wait?

thank you John!

For future reference, you might check with core provider - more and more of them have programs that will flag duplicate items on an account.......