Time Limit On Encoding Errors

Question:

Is there a limit on the time that we can go back on an encoding bank for errors on encoding? Our customer has brought the items to us which total about $500 and we would like to push this loss onto the encoding bank under UCC 4209, but we can't find where the UCC limits the time period in which this warranty is valid.

Answer:

The Federal Reserve will handle encoding errors brought to their attention within six months of the cash letter date. After that, the reconciliation is "bank to bank" and must take place within one year of the cash letter date.

First published on BankersOnline.com 2/11/02