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#2223030 - 10/04/19 01:55 PM statute of limitations on wic claims
madukes Offline
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madukes
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Flyers Country
We just received about 20 unauthorized draft claims from another bank some of the items dating back well over a year ago. How far back are we legally required to go for reimbursement to them? Is it based on the date we receive the claim? Can we deny the claims if our customer states they have written or verbal authorization? They are a collection agency.

Thank you!

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#2223237 - 10/07/19 10:01 PM Re: statute of limitations on wic claims madukes
rlcarey Offline
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rlcarey
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Galveston, TX
What is a wic claim?
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#2223285 - 10/08/19 03:04 PM Re: statute of limitations on wic claims rlcarey
madukes Offline
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madukes
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An unauthorized remotely created check (draft). Our customer is a debt collector and routinely deposits these items. I have received claims for 20 items going back to 6/2018 for one customer at another bank. Apparently two separate payments were done each month for different amounts.

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#2223295 - 10/08/19 03:56 PM Re: statute of limitations on wic claims madukes
John Burnett Offline
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Cape Cod
Since these are paper items (or started out that way), they are covered by the UCC. If both banks are in Pennsylvania, you'll look at section 4-406 in the PA UCC, which provides a one-year statute of limitations.

There is also the possibility that the paying bank has in its deposit contract a shorter time period for its depositors to claim items are unauthorized. That may work in your favor, since you have a defense against a claim from the paying bank if the paying bank's customer's claim wasn't timely.

I do hope you have a contract provision with the debt collector that you have the right to pass on to the debt collector any enforceable claim that a RCC was unauthorized.
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#2223300 - 10/08/19 04:15 PM Re: statute of limitations on wic claims John Burnett
madukes Offline
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madukes
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Thank you John!
Yes we have been charging them for any unauthorized draft claims we have been receiving both through the fed and directly from other banks. This was just an unusually high number of them coming in all at once and all pertaining to the same maker.

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#2223302 - 10/08/19 04:24 PM Re: statute of limitations on wic claims madukes
madukes Offline
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madukes
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I am looking at the other bank's Account Agreement online and it does state that they are to notify the bank within 30 calendar days after the statement was mailed or otherwise made available to them of any forgeries, errors or other problem with the information shown on the statement.

So we can use this as the basis for denying their claims?

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#2223326 - 10/08/19 06:05 PM Re: statute of limitations on wic claims madukes
John Burnett Offline
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I suggest you take that account agreement and a citation to PA's UCC 4-406 to an attorney well-versed in how the UCC provision is interpreted in PA courts and ask for an opinion. There are a couple of parts of 4-406 that address timing of claims of unauthorized items, and one of them has some catches to to. So it can depend on how the contract provision is worded and how a court would view the timeliness of any of that bank's depositors' claims against that bank.

I'm not an attorney, and we don't provide legal advice in these forums. Just practical advice.
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#2223330 - 10/08/19 06:19 PM Re: statute of limitations on wic claims madukes
John Burnett Offline
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I have heard of a few banks that have contract "riders" with depositors of RCCs that provide that the bank may charge back against the depositor's account any RCC that has been returned, regardless of when it was deposited, shifting the burden for making any claim for late return to the customer depositing the RCCs.
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#2227495 - 12/16/19 08:46 PM Re: statute of limitations on wic claims madukes
madukes Offline
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sorry for the delay in replying (couldn't remember my password and wasn't getting the reset emails) smile
We spoke with our customer who is a debt collector. They had written correspondence between the maker and themselves which confirmed the payments were legitimate.

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