Answer:
by Randy Carey:
Sounds like you have an out based on your Depositor's Agreement as you can modify that section of the UCC, but otherwise you would be liable. Talk to your legal counsel.
Answer:
by John Burnett:
Like all the states, New Jersey has a Uniform Commercial Code. It's Title 12A in New Jersey. Sections of the NJ code numbered 12A:4-4xx deal with bank accounts, checks and other items. Section 4-401 makes it pretty clear that a customer is not liable for a check the customer did not sign.
Section 4-406 deals with the customer's responsibility to review statements of their account and promptly report to the bank any unauthorized items or alterations. There are portions of this section that address comparative responsibility for a loss (whose fault was this stuff) and a special paragraph on prompt customer reporting of fraudulent or altered checks involving a repeated wrong-doer.
The last paragraph of New Jersey's section 4-401 cuts off the customer's right to make a claim for an unauthorized item or alteration after one year from when the bank sent or made available the statement on which the item in question is shown as paid from the account. (Some states only allow 180 days).
As Randy noted, a bank may modify the time periods in section 4-401 in its deposit account agreement(s) as long as it does not disclaim responsibility for any bad faith, etc. This is where you need to talk to legal counsel to see whether your deposit agreement has modified those time periods (this may depend on how courts in your state have ruled in similar situations), or how to modify the agreement to effectively shorten the customer's response window.
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