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Forged Endorsement - Recovering the Loss

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Question: 
My customer says that a check she wrote to her daughter was never received, however, the check has cleared the customer’s account and she states her daughter’s signature has been forged. I know the BOFD warrants the endorsement, but what action must be taken to recover the loss? Does the paying bank need to have an affidavit of forgery of the endorser? Please advise.
Answer: 

The claim starts with the daughter, who completes the forged endorsement affidavit. Your customer lodges a claim with you, using that affidavit, for wrongful payment. You lodge a transfer and presentment warranty claim against the depositary institution.

First published on BankersOnline.com 9/29/08

First published on 09/29/2008

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