Answer:
The second time it was presented you had the right to return the item by midnight of the banking day following the banking day of presentment. If you did not, then you "accepted" it and you cannot change your mind. The rule does not change because the item was presented as an image.
Many banks' procedures for processing stop payments were implemented when every check got a physical inspection prior to payment. In that environment, this check would never have been paid on second presentment. However, by removing the stop payment order from your automated system your bank opened the door to the problem.
You may have a claim against the bank that accepted the item for deposit and/or the person who deposited it for their apparent lack of good faith. It will be an uphill struggle. Regardless, your customer has no liability on the item.
First published on BankersOnline.com 11/28/11
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