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Time to Return Possible Fraudulent Check

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We have a customer that deposited a check, which we believe to be possibly fraudulent. The check was issued for work in another country and the description doesn't match what the depositor does or the work in the other country. The work is being performed by his girlfriend and we believe the girlfriend is solely on the internet. So there are a number of red flags. How long does the issuing bank have to return the check to us for reimbursement from our customer's account? Does that time frame differ if the check is deemed to be fraudulent? I have heard up to one year. However, we can't hold the funds that long, or is there a stipulation-reason we could use to hold funds for one year? If the funds are gone, are we required to return the funds after 90 days? After one year? We are trying to plan not to get caught having to return $10,000 that we believe to be fraudulent.

Not knowing the nature of the check - i.e., drawn on a US bank or foreign bank, it is hard to say. Foreign checks sometimes can be returned for a long time. You also do not indicate what about the check you think might be fraudulent, that also impacts potential return times. Once you accept such a check for deposit, there is not really much you can do.

First published on 12/13/2020

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