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Bank Liability Forged Check

Answered by: 
Randy Carey

Question: 
If a business client presents a forged check to our bank after reviewing their bank statement and we return it to the bank of first deposit that day but now 28 days after it was honored at that bank, are we timely and will that bank remain liable? If not, are we liable to our customer when they have followed our customer disclosures regarding such forged or altered items?
Answer: 

You have until your midnight deadline to return a forged check (assuming that you are referencing the forgery of the issuer's/drawer's signature). Your return, as you've described it, was not timely, and the depositary bank can look to your bank for reimbursement because it became accountable for the amount of the check when the midnight deadline passed.

First published on BankersOnline.com 8/6/12

First published on 08/06/2012

Filed under: 
Operations
Filed under operations as: 
Disclosures
Forgery
IT

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