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Liability or Recourse on a Counterfeit Check

Answered by: 
John Burnett

Question: 
My customer deposited a check into their account 10/2005. The bank that the check is drawn on recently sent me a letter 4/14/06 stating that the check was a counterfeit. What is my liability or recourse?
Answer: 

Counterfeit checks are exactly the same as a check drawn on an account with an unauthorized signature. The paying bank has until its midnight deadline to identify the problem and return the check. Unless that check took six months to get to the paying bank, the paying bank is accountable for the amount of the check, not you. I suggest you politely inform the paying bank that you will not be honoring their claim.

First published on BankersOnline.com 5/29/06

First published on 05/29/2006

Filed under: 
Security
Filed under security as: 
Checks
Counterfeit

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