Reclamation Period for Forged Signature

I have to assume that you're asking about the period during which your customer is able to claim a reimbursement from your bank for paying a check on the customer's account when the customer's signature on that check is forged.

The foundational rule covering this question is in Section 4-406 of the Uniform Commercial Code as adopted in the state in which the bank is located. The wording and section and paragraph numbering of the UCC in your state may differ from those in the version recommended for adoption, so you need to check that state version to be sure of the answer.

Under paragraph 4-406(c), the bank's customer must exercise reasonable promptness in examining account statements and the items reflected as paid on them to determine whether any payment was not authorized because of an alteration or an unauthorized signature (which includes a forged signature), and promptly notify the bank. Section 4-406 does not define what is meant by "prompt," "promptness" or "promptly," and the bank is free to define what is meant by those terms in its deposit contract, as long as the definition is not unreasonable. Courts in some states have upheld definitions that allow customers 60 days from the date the statement in question is sent. Some courts have upheld shorter periods, such as 30 or fewer days (particularly in the case of business accounts).

In cases in which the same wrongdoer is involved in multiple unauthorized items, paragraph 4-406(d)(2) typically requires the customer to notify the bank within 30 days of the date the statement is sent showing payment of the first such item, and the bank can avoid responsibility for any of the other multiple items paid after that 30-day period.

The foregoing all assume that the bank exercised ordinary care in paying the item(s) in question.

If the deposit contract fails to define a customer notification deadline and the same wrongdoer rule doesn't apply, most states cut off the customer's ability to make a claim for payment of an unauthorized item after one year from the sending of the statement showing the payment of the item. A few states impose a shorter claim window on the customer.