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Returning a Counterfeit Check to Customer

Answered by: 
Randy Carey

Question: 
If my Credit Union is presented with a counterfeit check that they confirm is counterfeit, can that original check be released to the member or is our institution potentially liable under any regulation should another institution take a loss on that counterfeit item and learn we had the item at one time and released it back to the member and therefore back into circulation? Can we just have the member sign a release form acknowledging the item is counterfeit to solve this situation should the member insist on retaining the counterfeit item?
Answer: 

If the check has been returned as a counterfeit, it should be so marked on the face of the check. I see no problem releasing the check back to the customer. They may need it as evidence in pursuing civil action against the person that gave them the check.

First published on BankersOnline.com 3/7/11

First published on 03/07/2011

Filed under: 
Compliance
Filed under compliance as: 
Counterfeit
IT

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