Stolen & Forged Checks - Where Do We Stand?

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Question:

We have an organization that had checks stolen. Some of the checks were brought into our bank and cashed at our teller window by the person forging the endorsement. The signers on the account are bringing us an affidavit of forgery. Where does the bank stand on the checks we cashed? I assume we are out and would need to prosecute the forger.

Answer:

That would be my understanding. You might make a case that the customer's negligence led to the checks being stolen in the first place and try to assign them some of the liability, but I am not sure whether that would be worth your while. I'd recommend you consult with the bank's legal counsel before proceeding down that path.

First published on BankersOnline.com 3/15/10