Check Fraud Reporting Time Frame

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Question:

What is the time frame that a customer has to report "check fraud" (forged signature or endorsement) on an account (consumer or business) to be reimbursed by the financial institution?

Answer:

The model version of the UCC provides for such claims up to one year from when the statement showing the payment in question, if the problem is an alteration or forged drawer signature. That can be shortened by agreement of the parties (in your deposit contract). Some types of fraud (for example, fraud involving a repeat offender) require a much faster notice for the depositor to escape responsibility for "subsequent events."

Claims for forged endorsements can be made in most states up to three years from learning of the forgery. Some states have a shorter period in their versions of the UCC.

First published on BankersOnline.com 4/09/07