An item was presented for cash at the bank. The handwriting and signature matched our customer's previous checks and signature card. However, the customer is now stating that they did not process this item and it is a forgery. What due diligence does the bank have to follow since we believe this is NOT a forgery but our customer trying to gain funds. The customer has completed and signed an affidavit of forgery. Does the bank have an obligation to give credit back to the customer without an investigation or police report filed? At what point is our customer liable?
Before returning a fraudulent check for any type of forgery, we require the completed forgery affidavit to be scanned to the Operations department before the check is returned, and the original follows later. Do you agree with this requirement, or do you think the check should be returned before getting the affidavit?
Is there a timeline for a check to be returned as a forgery or fraudulent? If so what would the reason code be?
Our bank returned a check for forgery on 02/13/15 after the customer notified us in February and signed an affidavit of forgery on 02/07/15 that was processed on 12/31/14. The check has been returned to our bank as a late return. What is the amount of time allowed on a return for forgery and is this a late return?
A check payable to 2 individuals - Payable as "and". One person forged the endorsement of the other. How much are we liable to reimburse the person that did not sign, Half of the amount since it was payable as "and"or the full amount of the check?
Is there any course of action the Bank can take to help a customer who notified us 6 months after 3 fraudulent checks totaling over $2400 were debited from their account?
We are in a spitting match with another bank over some forged checks. We accepted them and sent them for payment to the other bank back in January. Over a month later, the bank returned them - one was stamped NSF, the other two had no reason, so we called and the bank faxed us forgery affidavits. From day 1 of my banking career, I have been taught that the paying bank eats forgeries, so we returned them as late returns. Then we got a letter from the bank demanding payment saying we had breached the transfer warranties (since there were forged signatures). We replied you are outside of your timeframe for breach of warranty and besides, we are holder in due course and you can't demand payment for forgeries from a holder. They replied since you knew they were forgeries, you were on notice of the breach of transfer warranty therefore we are within the timeframe. Neither one of us is giving in, but I can see where they are getting the breach of transfer warranty, which seems to be a contradiction to the holder in due course defense against forgery. So can we/how do we counter their argument of the breach of transfer warranty?
My bank follows a rule that we do not accept checks endorsed For Deposit Only or Pay to the Order of [a third party]. Can you direct me to the guidance on this, please?
I found this good information about forged endorsements on your site; however, I am wondering what the drawee bank liability would be if they don't return a check that has no endorsement at all? As a matter of law, a drawee bank does not have a duty to conduct any review of payee endorsements on checks received from a depository bank. Under the UCC, a check bearing a forged endorsement is not properly payable (Revised UCC . 4-401). If the drawee bank pays a check bearing a forged endorsement, then it is obligated to recredit the drawer account for the item.
We have a joint checking account that was opened by a husband and wife. The husband and wife agreed that the purpose of this account would be to pay joint bills. They ordered checks requiring two signatures, however, the account was not set up as a dual signature account. (The signature card that is signed by both parties makes no mention of a dual signature requirement.) Couple is now going through a divorce and the wife forged husband's name on two of the checks totalling $7000.00. Husband is now asking the bank what his recourse is. I have told him that it is an issue he needs to work out with his wife because the signature card does not require two signatures. Does he have grounds for a formal forgery claim against the bank?