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#2247325 - 01/07/21 06:16 PM Can We Return Alt/Fict Checks For No Endorsement?
Anonymous
Unregistered

A customer of ours had several checks drawn on their account that were counterfeits. They did not discover this for about a month, so although they were within their timeline of reporting the items to us, we were past the midnight deadline in returning the items to the BOFD through the FED. The BOFD now kicking these back to us as late returns through the FED. These checks were not endorsed by the payee - they just wrote "For Deposit Only". I know lack of endorsement should be handled within the midnight deadline too, but would we be able to return these items for lack of endorsement if the customer signs an affidavit? Just considering all of our options. Or if anyone has any other experience we may be missing, it would be greatly appreciated.

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#2247326 - 01/07/21 06:24 PM Re: Can We Return Alt/Fict Checks For No Endorsement? Anonymous
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,689
Illinois
Forged maker's signature trumps any endorsement issues. The only person who can claim a forged endorsement is the payee. If these checks are not returned by the midnight deadline, your institution bears the loss.
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Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
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#2247330 - 01/07/21 06:49 PM Re: Can We Return Alt/Fict Checks For No Endorsement? Anonymous
Anonymous
Unregistered

OK, just to be sure I have this right. I understand what you are saying about the forged endorsement. We would not be able to return for NO endorsement (like we can on our large item reviews for no endorsement by the midnight deadline)? I know some states have three year and sometimes one year windows on endorsement issues, but maybe I'm mixing two things together.

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#2247335 - 01/07/21 07:34 PM Re: Can We Return Alt/Fict Checks For No Endorsement? Anonymous
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
A customer of ours had several checks drawn on their account that were counterfeits.

You paid counterfeit items. You miss your midnight deadline - you take the loss. No way around it.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2247354 - 01/07/21 11:01 PM Re: Can We Return Alt/Fict Checks For No Endorsement? Anonymous
BrianC Offline
Power Poster
BrianC
Joined: Nov 2004
Posts: 6,689
Illinois
Let me provide an example to help you separate these issues.

Let's say that I receive a check payable to Brian Crow in connection with winning the UK National Lottery (obvious scam and the check is counterfeit drawn on your bank.)

Now lets say that Joe Thief stole my UK Lottery Check and either forged my signature or just wrote For Deposit Only and deposited the check payable to me into his account. Even if I discover that my check is stolen, I am precluded from trying to make a forged endorsement claim, because the check on which my endorsement was forged was not a properly payable check since it was counterfeit. Therefore there will never be a valid reason for returning a counterfeit check for a forged endorsement. Your responsibility to your customer is that you only honor properly payable checks, which you did not do, and the UCC only gives you to your midnight deadline to return them.
_________________________
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!
www.tcaregs.com

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