If the check was presented to the paying bank via the Fed, FRBServices check adjustment rules would permit the paying bank to submit either presentment of the check as a PAID adjustment. It apparently chose your bank. You're stuck holding the bag unless you can collect from your depositor.
Restrictive Endorsement-Mobile Deposit
Our customer mobile deposited a check with their signature endorsement along with a restrictive endorsement of "mobile deposit only [FI name] [date]". The customer then scratched/crossed out the restrictive endorsement and negotiated the item a second time. We were charged back on the mobile deposit. I understand we did not process the paper check, however the restrictive endorsement was on the mobile deposit and later scratched out. Do we have any recourse back to the second bank to recover funds?
First published on 01/05/2020