Refund Fraudulent Check Fees Clearing Business?

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Question:

Is a bank legally required to refund all fees associated with fraudulent checks clearing a "Business Account?" While I believe it may be a good business decision in satisfying the relationship, I do not feel we are legally obligated. Please advise if this is covered anywhere.

Answer:

For example, a counterfeit check drawn on your customer's account, business or otherwise, generates an overdraft fee and you're not certain about whether the fee must be refunded?

There is no federal law or regulation, but the theory behind the fees your bank charges is that they are in connection with a service. Your bank did not provide a service when it overdrew the customer's account based on a forged signature. If it did not earn the fee and it should give it back.

First published on BankersOnline.com 12/17/12