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Returned Check Rules

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I would appreciate direction on where to find in the regulation(s) the requirement for counterfeit checks to be returned within a 24 hour period of payment. We have a client that has had a counterfeit check clear their account and needs proof that it must be returned the next day or it is considered a late return.

Consult your state's Uniform Commercial Code 4-302. Also note that under UCC 4-401 the responsibility for failure to return a forged or counterfeit check timely falls to the depository institution for honoring a check that was not properly payable. The customer would only be liable if the depository institution felt it could prove that negligence on behalf of the customer contributed to the loss, or the notice of counterfeit item was not timely under UCC 4-406.

If you are unsure of the application of the laws in your state, you should consult with legal counsel as my response should not be considered legal advice.

First published on 03/26/2023

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