A customer notified us in July 2006 of checks payable to him individually and to him and his ex-wife jointly to which his endorsement had been forged. The checks in question were processed June 2005 and October 2005. The customer has also found more checks to which his endorsement had been forged dating back beginning February 2004. What is the stature of limitation on how long the customer has to notify us of a forged endorsement? Any literature we have found is very vague on this. It simply stated that the customer could be held liable if not reported in a "timely manner" or if they don't monitor their account statements and "promptly" report. Please be more specific.

I'm not a UCC expert but I have heard that the depository bank guarantees endorsement for 3 years. Also, if we're talking forged endorsement, then that would most likely not involve a customer examining their statement because there would be no transaction to examine. If a check was payable to an individual and the funds were deposited to that person's account even with a forged endorsement, I don't think forged endorsement is an issue. In that case the individual received credit for the check in question and there would be no reason to forge the endorsement.

The UCC Code should cover this. You may be able to enter them for collection on a "without entry" basis. He would need to file an affidavit.

How did the customer "Find" checks payable to him? If another party issued the checks how would he have access to them? Is he stating the ex-wife forged them? Was she his ex at the time? Did the money go into a like name account?

Sorry for so many questions, but this is the stuff you need to ask to know which direction you are going to go with this investigation. I love stuff like this, getting to the bottom, trying to figure out if he is trying to get her in trouble or was he really a victum of theft? Hummmmmm.....The plot thickens.

The payee should claim non payment from the issuer of the check, and supply an affidavit of forged endorsement.

The issuer (drawer) of the check then enters a claim against the paying bank, and that bank makes a claim against the depository bank (or any other intervening holder). The depository bank endorsed the item and therefore warranted that all prior signatures (other than drawer's) were genuine and authorized.

In theory, the depository bank then recovers the money from the depositor (the spouse in this case).

All of this can be altered in a court proceeding if it is found that the original claimant had somehow obtained some or all of the funds (or benefited from them) in some other way.

In most states, the statute of limitations is three years from the cause of action (knowledge of the alleged forgery). In some states the deadline is as short as one year.