Answer:
Answer by Ken Golliher: I have to assume that the forgery is the drawer's signature; i.e. the signature on the face of the check. In general, it is the drawee bank's responsibility to recognize the signature of its customer; i.e. if you do not return the check before midnight of the banking day following the banking day of presentment, it's your bank (not the customer) that is out of luck.
Under the model version of the UCC, the customer has one year to draw a forgery of his signature to your attention. Your state laws may shorten that time frame. It is likely that your contract shortens it in any case.
Answer:
Answer by Brian Crow: The model language of UCC 4-111 "statute of limitations" provides a 3-year window to assert claims against the bank for endorsement signature forgeries. However, section 4-406 regarding a customer's duty to discover a forged signature states that customer is precluded from making a claim against the bank if the customer does not notify the bank "within one year after the statement or items are made available to the customer."
As Ken said, your deposit contract will specify the time frame the customer has to notify you. In the event your contract is silent, check your state's UCC 4-406.
First published on BankersOnline.com 1/23/12
print
share