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Affidavit Required?

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Are we required to obtain an affidavit from customers if they report a check counterfeit and want it returned?

This is really a two-part question. Should you or can you return the check? A counterfeit check is simply another form of check that is not signed by an authorized signer on an account. It doesn't matter that the check itself is a counterfeit; all that matters is that your customer did not authorize the payment. That means that you only have until your midnight deadline to return it. The midnight deadline is literally midnight of the business day next following the banking day on which the check was presented to your bank for payment. After that, your bank is accountable for the amount of the check.

It also means that your customer is entitled to recover the amount of the wrongful payment from you, if your customer enters the claim within one year from when the statement including the payment of the counterfeit item was made available, or an earlier deadline established in your account agreement. In some cases, clearinghouse rules will allow you to make a claim for reimbursement for a fraudulent check against the depositary bank after the midnight deadline, for a period of time that allows for statement review and timely claims. An example is the "Check Fraud Warranty Rule" of the Central Oklahoma Clearinghouse Association ([]COCHA[/url]).

As to the affidavit, I'd suggest you obtain one. Not only does it add some weight to your customer's claim, but it also provides an underpinning for any criminal or civil claim your bank might wish to pursue if you are able to identify a suspect in the fraud.

First published on 5/14/07

First published on 05/14/2007

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