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Returning Imaged Copies

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Question: 
Our bank has recently moved to imaging and we now have occasion to use an imaged item (in an endorsement claim) as a replacement for the original which has been destroyed. Is there a stamp or a standard practice used to notify the receiving bank of this item that the imaged copy has now "become" the actual check?
Answer: 

Utilization of a photocopy in place of an original is covered by the Federal Reserve's Operating Circular 3 in part 19. It states that a correctly prepared photocopy must be used. That means a legible copy of the front and back of the cash item and it must bear the sender's current indorsement and the following or equivalent signed legend:

This is a photocopy of the original check which we indorsed and which was reported missing or destroyed in the regular course of bank collection. We guarantee all prior and any missing indorsementsand the validity of this copy. Upon payment of this copy in lieu of the original check, we agree to hold each collecting bank and the payor bank harmless from any loss suffered, if payment is stopped onthe original check and the original check remains unpaid.

Click here for an online copy of Operating Circular 3.

First published on BankersOnline.com 1/15/01

First published on 01/15/2001

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