Can anyone tell me where in the UCC code it discusses forged endorsements and the time frame for returning a forged endorsement item? We just received one and I believe the drawer has 12 months to return it to me forged endorsement, but I have Sr. Management stating it should have been returned within 60 days. Thank you for your help.

Forged endorsements fall under breach of warranty, which may be claimed for three years after the transaction. See UCC 3-118(g).

You are a life saver!! Thank you very much.

The drawer has three years to draw it to your attention under 4-111. As JacFSB notes, the paying bank has the same time frame to go back to any bank that passed it to you and provided warranties. We're both quoting from the model language, look at the parallel provisions in your state - they may differ.

While some portions of the UCC can be limited by agreement, you cannot impose on the drawer a duty to detect a forged endorsement; your signature card cannot shorten this statutory time frame. The law assumes that the drawer is incapable of recognizing a forged endorsement. If you send images of only the front of the item you made it impossible for him to do so.