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MSB Customer Cashes Altered Check-Alteration Claim

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Our bank has several MSB check cashing customers. On occasion, an MSB customer will inadvertently cash an altered check, which eventually is deposited to their account at our bank. When our bank receives an affidavit of alteration from the paying bank, is it permissible to debit the MSB customer's account for the claim amount since they are the ones that "cashed" the check, or would our bank be responsible for paying the alteration claim?

by Randy Carey:

The MSB remains responsible for any altered checks they accept and deposit.


by Brian Crow:

There should be verbiage in your account agreement which states that the customer is liable for any items that it deposits that are returned.

First published on 06/09/2019

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