Someone writes a check to the electric company but puts it in the wrong envelope and and the phone company cashes in error. Said customer comes to us, what responsibility do we have to address the error, does UCC come into play? The customer called the phone company and was told it will take 12 weeks to correct but technically the endorsement wasn't the payees. We have to response quickly so I'd appreciate any responses.

I'd think that you could put it back on the BOFD for lack of proper endorsement, couldn't you? To me, it seems the same as if John Q Public had endorsed a check made out to Jane Doe and deposited it to his own account without Jane's endorsement on the check.

BB, I was thinking the same thing too but UCC is not my strong point so I was looking for other opinions. Thanks.

I'll 2nd that opinion, but send a "without-entry" claim to the BOFD demanding payment for the mishandled check. An endorsement claim should NOT be sent back through the fed.

You cannot fix this. Generally, when the customer puts the checks in the wrong envelopes, one creditor is overpaid and another creditor is underpaid and any "damages" to the customer are in connection with the latter.

Assuming that you actually saw the checks when they were presented, you only had two choices, pay them or return them.

Legal machinations aside, that would be the core of my response. Something along the lines of, "This is your fault, not ours. Had we caught it as you imagine we should have and returned both checks neither bill would have been paid on time and you would have had late charges on both. Instead, we paid both items and now you only have problems with one creditor." (Obviously, you may want to smooth the sharp edges on that message, but it's still the right message.)

Try to sign them up for online banking and bill pay! I mean that slightly tongue in cheek, but also as an opportunity to push the product. It would avoid this situation occurring unless the bank really made an error, in which case the bank would fix it. But the error would be unlikely.

Unless of course this customer did this intentionally - it is an old ruse to gain time on bill payments.