Guidelines on Returning Counterfeit Checks

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Question:

What are the guidelines for counterfeit check returns? Checks were made up in different names and with our routing and a customer's account number. The discovery was made when customer received his statement- can the items still be returned to the accepting bank and customer.

Answer:

The return of counterfeit checks is subject to a bank's midnight deadline. In other words, the paying bank is charged with the responsibility for knowing its customer's signature. So, if one of the checks was presented to your bank for payment on Tuesday, February 15, 2011, it should be returned by midnight on Wednesday, February 16, 2011, or your bank is responsible for the amount of the check.

Any claim your bank might have against the depositary bank for breach of presentment warranty or a so-called "Rule 9" check fraud warranty has to be made without entry, directly with the depositary bank (or via clearing house procedures). A claim under a presentment warranty would have to claim that the depositary bank knew (or at least should have known) that the check carried an unauthorized drawer's signature.

First published on BankersOnline.com 5/2/11