Answer:
First, let's discuss "returning" checks unpaid. Your bank has only until its midnight deadline (check presented for payment on Monday, on the way out the door as a returned check Tuesday) to return a check presented for payment.
After the midnight deadline, you can make a claim against the depositary bank for breach of its transfer warranties under UCC 4-207 and/or presentment warranties under section 4-208. Such a claim cannot be made for checks purporting to be drawn on your customers' accounts that are counterfeit or unauthorized. Regulation CC provides for warranty claims against the depositary bank for unauthorized remotely created checks.
Claims for alteration or fraudulent indorsement can be made either directly against the depositary bank provided you have received an affidavit of alteration from your customer (the drawer) or from the payee (forged or missing indorsement and non-receipt of the check from drawer); or using the Fed Check Service's check adjustments service (if the check was received from the Fed) or a similar service from a check clearinghouse (if that's how you received the check), if the clearinghouse offers such a service. Your customer has one year (check section 4-406 of your state's UCC, which may have a different deadline) or a shorter period based on your deposit contract to assert a claim that a check on their account was altered or not authorized.
There is no time frame in the UCC for the depositary bank's honoring of such warranty claims. There is likewise no deadline in the UCC for reimbursing your customer (check your state's UCC for any unique provisions). If the claim is substantial, you may want to get an attorney involved.
print
share