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Who Is Responsible For A Late Return?

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A customer deposited a check in September 2002 and we cleared it in the normal fashion. We received it back in a returned item in February 2003. We refused the return on the basis of a late return to the Fed (with entry). The Fed returned it back to us stating that we had to settle directly with the paying bank. The paying bank indicated to us that they returned it on time. However, according to the paperwork (they provided us with copies), they returned it to the incorrect institution. The check is for $7000 and we never received notification. Who should we submit our claim to? Why is the Fed accepting returns that are several months late?

I'd be curious to see that paper work. When we had this problem while I was still at the bank, I found that in cases like this that I sent it through Fed to the right bank. And the bank returning sent it to the right bank. Fed was the one that messed it up and sent it to the wrong bank. But if I learned nothing else when I was dealing with Fed for my bank it was the fact that Fed may not always be right - but they are NEVER wrong! You may be fighting City Hall. You might try dealing with the other bank, and if you can prove without a doubt that it was their error, you could have a basis for you suit. Check carefully before you call the attorney, though.

First published on 06/2/03

First published on 06/02/2003

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