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Counterfeit Check from BOFD-Who Takes the Loss?

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Question: 
My bank has received a counterfeit check from a depositing bank. Our customer called the day the check cleared his account and we returned the check to the Bank of First Deposit on the same day as reported. Who will take the loss on this item, the BOFD or my bank? And should we treat this as a fraud/ disputed item ?
Answer: 

If you met your original return deadline for returning the item to the bank of first deposit after presentment, they will take the loss. If you did not meet your return deadline, your bank is liable for paying the counterfeit item.

First published on 06/02/2019

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