Forgery Claims: Time frame for recrediting a customer

Question:

I have been approached by a customer who banks with another financial institution for information because they have not been recredited for forgery losses that they reported to their bank. Their question is... Is there a specific time frame that a bank must follow in recrediting a customer who submits an affidavit of forgery for a forged makers signature? I understand that the customer has one year to report the forgery unless the account agreements specify a different time period, but I am not aware of any banking regulation that states that the bank has to provide credit to the customer within a specific time frame. Can you help clear this up?

Answer:

Regulation E, governing EFTs, is a consumer protection law. It provides error resolution procedures and specific time frames for taking action. The UCC governs checks, but it is a commercial law which is simply intended to be fair. Beyond saying you must be "fair" and act "in good faith," the UCC does not provide specific time frames for resolving disputes.Providing customers with advice on their disputes with other banks can be a bit dangerous.

First published on BankersOnline.com 9/2/02