What is your bank's procedure when a customer reports his check order never arrived? Previous bank, we placed a stop payment. New bank I am at, customer reported new order lost, bank put an alert message on account which lasted 6 months, rather than a stop (again 6 mo's but could have been explained to customer & his opt to renew). After the message expired, 6 checks forged by maker were cashed at the same branch the customer reported the checks missing. Many problems - tellers are not required to check makers signatures for on-us non-customer checks. They did payee get ID. Customer is irate, refuses to close account - does not know why bank "let this happen". Waiting on affidavit & police report. Any advice? Procedures at your bank? Procedures to implement to prevent this here? Thanks for all input

I would close the account in the event a book or an entire order of checks was lost. Since most stop payments expire after six months, this creates too much risk to the bank and I doubt a customer would be willing to sign a hold harmless agreement, if it would even be legal to require it where your located. Although your customer refuses to close the account, that decision ultimately lies with you and you need to protect the bank and the customer, because it will usually be the bank that ultimately loses money, not the customer.

When a customer reported that checks had been lost or stolen, we would freeze the account and get a list of checks they remember writing and only pay those or contact the customer when items came in. Once all outstanding legitimate items cleared, the account would be closed. At the same time we would open a new account.

Customer's right. Bank's wrong, so far. A stop payment worked fine for lost check books (new checks here) back in the day when banks physically inspected checks. Now, banks pay based on the MICR line. As a risk management technique, the stop payment is a little silly - there is no assurance that the thief did not use one of the new checks as a "breeder document" and buy 200 more checks outside the range of check numbers fed into your computer.

Don't count on a judge enforcing a "hold harmless" agreement if you keep the account open. She will say you knowingly overreached the consumer when you supplied the document; you understood the risks and the consumer did not. (Obviously he didn't, who would agree to be responsible for forgeries of his signature?)

Going forward, all of the risk from leaving the account open is yours. If the customer refuses to close the account, your bank needs to close it for him. Make it up to him as best as you can, but, as you know, some mistakes can cause the bank to lose a good customer.

In the future, when checks are lost or stolen, close the account, no exceptions. As Guitar Dude suggests, you are still going to be stuck reviewing items coming in on the old account and either posting them to the new account or returning them for a reason other than "account closed."