Answer:
The better way to handle it, if you catch the problem quickly enough, is to return the check for endorsement within your midnight deadline. Then you don't have to worry about trying to make a "Without Entry" claim on the depositary bank's presentment claim. If you missed the midnight deadline, and you can obtain an affidavit from the payee whose endorsement is missing that he, she or it did not receive benefit for the negotiation of the check, you have up to three years, depending on the state in which the depositary bank is located (it's three years in most states, by the way).
Notify the depositary bank of your claim promptly. If you take more than 30 days to let them know after you've got the affidavit and identified the depositary, your claim amount could be lessened, if your delay caused the depositary bank to lose money.
First published on BankersOnline.com 4/25/11
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