Regulatory Info: Late return claims

Question: I write corporate platform procedures and would like to know if you have any Regulatory information concerning "Late Return Claims" or "Claim of Delay"?

I have been talking with my Compliance Department about Late Return Claims and all I keep getting back from them is information about Return Item Rules. I need info on sending a returned item back to the drawee bank because they returned it to us late - that is, after the regulatory deadline. It then causes a loss either to us or to our customer, which should not be sustained if the return had been sent timely or without entry.

Answer: This is becoming a common problem in operations. First you need to talk to your return items department people. If they see an item is late the day it comes in, they can turn it right around and send it back to FED, "Too Late To Accept". FED would turn right around and send it back to the bank that sent it in the work incorrectly in the first place. The problem arises when the return item department doesn't notice it's late, and sits on it too long to kick it back.

Call your local Federal Reserve Operations area, ask for the supervisor - each FED has it's own rules here, it seems. There is not (to my knowledge) a standard form to use for late return claims. I know the Philadelphia FED with which I dealt had such a form, and we made use of it many times. They will take the form, with the check, under separate cover, and return it to the bank that sent it to you.

Your other choice gets quicker results, though not sometimes to your satisfaction. Send the check back, snail mail, with a polite letter of complaint, pointing out the dates to them, and finish with the thought that you'd appreciate their check in reimbursement immediately. Believe it or not, sometimes it works. However, if you get the original check back by return mail, you might then want to send a demand letter, quoting the very rules and regulations sent to you by your Compliance Department, and tell the bank that if they wish to avoid legal action, etc., etc., etc. The action you take will depend, of course, on the amount of the check.If any of our readers have a different way, or have solved this with your local FED, please let us know. I can be reached at hurst@BankersOnline.com

Can a bank do anything to help a customer when a fraudulent check is posted to their account and the customer does not discover the item until they receive their statement? For example - the customer gives their account number to a firm to purchase goods. The firm creates a check and marks on the check "per customer authorization" and then inflates the dollar amount of the check or continues to send through checks that have not been authorized by the customer.

Copyright © 2001 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 11, No. 11, 11/01