Fraudulent Check Requirements

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Question:

We are a bank located in NY. We would like to know if it is required under state (if you know) or federal laws to have a customer sigh a claim form for an unauthorized/forged/altered check? If so, is it required to be notarized? We are aware that NACHA made provisions during the pandemic to allow WSUDs to be taken verbally, however we would like to know if it's necessary for checks and specifically if a Notary is needed as one might not be available in the branch on the day the claim is made.

Answer:

For counterfeit, unauthorized, or forged issuer signature checks on a depositor's account when you can return the check within your midnight deadline, you should have a notarized affidavit in file. If you detect the counterfeit or forgery and cannot get the customer's affidavit before returning the check, return it for "irregular signature" or "suspected forgery/counterfeit." If you cannot return such a check because you are past the midnight deadline, it's a matter of bank policy whether you will require your depositor to provide an affidavit.

If a depositor claims a check has been altered, you need an affidavit of alteration in order to file a claim against the depositary bank for breach of presentment or transfer warranties. If the payee of a depositor's check has claimed that their indorsement was forged or that they did not receive or indorse the check, their claim is against the issuer (your depositor), and your depositor should obtain an affidavit of non-receipt of proceeds/forged or missing indorsement, from the check payee. You will need a copy of that affidavit to file a claim against the depositary bank for breach of its presentment/transfer warranties.

Affidavits must be notarized.