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#1603173 - 09/13/11 09:11 PM Forged/Counterfeit Checks
ccrofford Offline
Junior Member
Joined: Aug 2011
Posts: 48
We have recently discovered that someone or a group of people have falsely printed and made out over $11,000 in checks with our bank information and our business customer's information printed on them. The checks were accepted by the payee, honored, and deposited into the Payee's respective customer accounts at the particular customer's bank (no checks were deposited into accounts at our bank). The checks are signed with a signature stamp, and endorsed by the Payee on the back (Some have account numbers with the endorsement, and some do not. None are consistent). Some checks were written as early as July 2011, and some are more current.

What do we need to do about these counterfeit checks? Do we submit them to the Fed? And then who is responsible for the $11,000 loss of funds? What are the laws in regards to counterfeit checks and forgery?

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#1603177 - 09/13/11 09:23 PM Re: Forged/Counterfeit Checks ccrofford
Doug Hendrickson Offline
Power Poster
Doug Hendrickson
Joined: Oct 2009
Posts: 3,927
Counterfeit checks and forgeries are governed by the state UCC.

I believe these would be considered counterfeit checks, rather than forged maker signature. It is my understanding that the drawee bank (you) would generally be liable for counterfeit checks. The bank would not be liable if it returned the counterfeit check before the midnight check return deadline.
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#1603183 - 09/13/11 09:33 PM Re: Forged/Counterfeit Checks ccrofford
BrianC Offline
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BrianC
Joined: Nov 2004
Posts: 6,685
Illinois
These items are governed by your state's version of the Uniform Commercial Code and your account agreement with your customer.

UCC 4-406 allows a customer up to one year to report a forgery and seek reimbursement from your bank.

The bank has the right under UCC 4-103 to modify this agreement and reduce the timeframe. (You will need to consult your own agreement to determine if this is case.

You only have until your midnight deadline to return the checks to the BODs as forgeries so you are clearly outside of your timeframe to do so. I would recommend contacting the bank's attornies to review your account agreement to see if you can impose some liability on the customer based on fail to exercise care in reviewing statements, and any potential customer negligence claims you may have if your customer at all contributed to the loss.
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