Time Frame to File an Affidavit on Forged Items

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Question:

Is there a time frame for a customer to file an affidavit on forged items? Our customer noticed some forged checks in his bank statements. We filled out an affidavit. We were wondering if there is a time frame on doing this. One of the banks that the checks are being sent back to says the customer didn't do this in the right time frame.

Answer:

If the forgeries are of the customer's signature on his checks, the customer has as long as a year to enter a claim against you, under the UCC. You may trim that period back in your contract and most banks do. Your bank, however, only had until its midnight deadline under the UCC to return the forged items. In other words, unless you caught the signatures long before your customer did, you can't return the checks. If you belong to a clearing house association with special rules on fraudulent check warranties, you may have a claim against the depository bank, but it would be under the clearing house rules, not under the UCC.

First published on BankersOnline.com 12/03/07