Our business customer's account was debited twice for the same check - payee did a mobile deposit to one bank and then cashed the original check here. Payee is an employee of our business customer. Since we paid the check twice, we gave our customer the money back and sent a PAID adjustment to the Fed. Someone here says we should have stayed out of it - make our business customer get his money from the employee. We were not at fault (endorsement on original check did not include a restrictive endorsement for MDC). Should we have given the money back or let the business customer go after his employee? Would the decision be different if this was a consumer account rather than a business account?

This Thread mentions a similar subject to yours.

As does this one .

Thanks. I had previously reviewed those threads as well. The question is should we have refunded the duplicate payment or just make the business settle up with the employee and the Bank stay out of it altogether?

Yes. The second presentment was not properly payable, since the check had already been paid. You owed the customer the funds. It's becoming increasingly important that banks study the pros and cons of acquiring systems that can detect such incidents in order to be able to make timely returns of the subsequent items or present teller alerts to prevent cashing items that have already been presented and paid.