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Counterfeit Checks: Why are we (the drawee bank) responsible after 24 hours?

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Question: 
In the BankersOnline InfoVault, I was just reading that a drawee bank (us, in this case) has no recourse if it pays a counterfeit check (please see <a href="http://www.bankersonline.com/operations/gurus_op1001b.html">"Counterfeit Check Reimbursement"</a>.) The Q and A appears to state the drawee bank may never send the item back to the bank of first deposit after the 24-hour deadline. Why shouldn't we send the item back to the bank of first deposit with an affidavit? They credited the payee on the check, and that payee signed the check. There is no reason to think the payee didn't knowingly perpetrate the fraud, as they were not a holder in due course, but the direct payee of the counterfeit check. The bank of first deposit has an account with a crook, and should be able to prosecute. In fact, there were two checks cashed at the same bank under two different names, but same "maker". The same article also at least implies that the account owner may also not be held accountable. This is a corporate customer, however, which uses a signature "stamp". The counterfeit includes the exact signature stamp, not reasonably distinguishable from the authorized stamp. We wouldn't have questioned the signature even had we examined the checks (they were under our threshhold.) Any further comment would be appreciated.
Answer: 

You may, of course, send a check with a forged signature or a counterfeit check back to the depository bank with an affidavit after the "day after deposit" time frame, but you can't send it back through the work. You'd have to send it back with a letter through the United States mail. And it will more than likely come back to you declined by the depository bank, because the liability on such an item is on the drawee bank.

And you can't assume the payee knew the check was counterfeit, because he/she may have taken it in good faith from the perpetrator. If you can prove negligence on the part of the depository bank, you may have an argument with them - for instance, was the item very OBVIOUSLY a counterfeit? Was the signature very obviously not genuine? One depository bank in New York lost the claim because the checks negotiated were drawn on a law firm and were cashed one at a time, all bearing the maker's signature of "Mickey Mouse". An obvious fraud.

The new UCC says the loss should fall on the party best able to stop the fraud. In the case of an excellent counterfeit (and we're seeing too many of them) it may be the depository bank was not negligent. In that case, the only place to stop it would be the drawee bank. That would be you.

As for the signature stamp - the corporate customer might be able to be held accountable if the actual stamp was used and in your investigation you found it was not properly secured or protected from fraudulent use. However, if it was a scanned signature stamp - that's hard to deal with.

First published on BankersOnline.com 8/12/02

First published on 08/12/2002

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