Limitations on Check Alteration Claim

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Question:

How long does a company have to file an affidavit of forgery for an altered check? The payee was chemically washed and altered 2 years ago. The original check was just recently located. Has the time limit for filing a claim expired?

Answer:

The general rule under the UCC (4-406) is a customer who does not within one year after the statement or items are made available to the customer discover and report the customer's unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration.

Check with your attorney to determine if other state statutes or caselaw have altered the general rule in your jurisdiction.

First published on BankersOnline.com 1/7/02