Time Frame to Return Altered Item

Altered items are subject to the UCC's midnight deadline for returns. Therefore, the claim of late return is correctly made. However, the transfer and presentment warranties in UCC sections 4-207 and 4-208 include a warranty by each prior endorser that the item was not altered. So you have a warranty claim against any prior endorser, including the bank of first deposit. In order to avail yourself of those warranties, you'll need to obtain an affidavit that the item was altered from your depositor and submit your claim on a bank-to-bank basis.

First published on BankersOnline.com 11/10/08