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How long do we have to return an altered item?

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Question: 
How long do we have to return an altered item?What is the timeframe period for returning a check for "altered payee". The altered payee was supposedly chemically washed because we cannot visually see any evidence of alteration. I understand that the timeframe is different from returning a check for "altered amount".
Answer: 

Altered items are returned due to a breach of a "presentment warranty;" the midnight deadline does not apply.

The customer has one year from the time the statement reflecting the altered item was made available to report it to you. After your institution learns of the alteration, you have 30 days to return the altered item along with an affidavit.

If there is a series of items altered by the same person, generally, the customer is responsible for notifying you within 30 days of receiving the first statement on which an altered item appears.

The time frames above do not change based on what is altered; e.g. it does not make a difference whether it is the amount or the payee. However, if a bank does not return the checks or images of the checks, it may not be possible for the customer to tell the payee has been altered. In that circumstance, the normal limitations would not be enforced.

Please review your signature card carefully. Modern signature cards often shorten these time frames. However, it is important to look at the signature card this customer actually signed, not necessarily the one you are using today. Some older documents do not contain any language which might improve your position.

First published on BankersOnline.com 12/3/01

First published on 12/03/2001

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