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#2234545 - 04/09/20 08:11 PM What Return Reason Code?
Jenny Roberts Offline
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Joined: Feb 2014
Posts: 164
Tennessee
I know nothing about returning checks that are fraudulent and the one that does them is at the bank and won't answer her phone frown

We have a business that had some fraudulent checks clear their account and wondering what return reason code we use and how long after they paid, do we have to return them? The checks were slightly altered.

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#2234547 - 04/09/20 08:15 PM Re: What Return Reason Code? Jenny Roberts
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,365
Illinois
If you are past your midnight deadline, you can't return via the Fed. What was altered? Payee name, amount, maker signature?
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#2234548 - 04/09/20 08:20 PM Re: What Return Reason Code? BrianC
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 164
Tennessee
I was just now told they were not altered but they were not written by the customer. Sounds like someone has maybe intercepted a check in the mail and has possibly created their own checks...

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#2234556 - 04/09/20 08:50 PM Re: What Return Reason Code? Jenny Roberts
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,365
Illinois
Your institution (like most) makes a risk based decision to not review every check that clears your bank. However, the duty to identify and return a forgery by your midnight deadline rests with your institution. The bank of first deposit has know way of knowing if your customer wrote the check or not.

Unless you and the bank of first deposit are part of the same clearinghouse and have a contract to share liability, your institution is on the hook for any checks not returned by the midnight deadline. If you send them back through the Fed, the bank of first deposit can make a claim of late return and send them back to you.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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#2234557 - 04/09/20 08:53 PM Re: What Return Reason Code? BrianC
Jenny Roberts Offline
100 Club
Joined: Feb 2014
Posts: 164
Tennessee
That's what I thought. Thanks!

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