Answer:
Start with the provisions of section 4-406 of the Uniform Commercial Code. In most states, a depositor has a reasonable time to examine banks statements, but must do so promptly, to identify unauthorized or altered items. What's reasonable? That's often a matter defined in the bank's deposit account agreement. Note that a customer is limited to thirty days from delivery of a statement when determining responsibility for checks forged by the same wrongdoer. Thirty days may be a reasonable time, but the bank is wise to say so in its deposit agreement. Some banks have successfully cut that time to fourteen days! By successfully, I mean that state courts have ruled that the contract provision is enforceable. Each state has its own court precedents on a matter like this. If the customer can prove that the bank failed to use ordinary care in paying an unauthorized item, the bank may be responsible for some part of the customer's losses. Finally, regardless of who contributed to the loss, the customer has an absolute deadline of one year from statement delivery to make a claim. Check your state's version of the UCC, which may vary slightly from the so-called standard.
First published on BankersOnline.com 9/22/08
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