We've lost transit checks - now what?

Answer by: Barry Thompson

This question may be impacted by your state law please direct your question to the banks attorney.

I once had a situation where our transit checks were dumped by an airplane losing altitude flying into Pittsburgh. The checks were not recovered and our microfilm was unreadable. Many institutions seldom check their returned microfilm until these problems happen.

In our case we set up a program where we would pay our customers to recover the checks. We than had our tellers who cashed the checks contact the customer. We found that some of our tellers had great relationships with the customers and recovered the checks. However you always have one customer who won't cooperate we were 99% successful.

Another area you may want to evaluate is your Financial Position Bond or Blanket Bond.If you're loss is substantial this might be an avenue open to you. However be warned normally the deductible is extremely high and the bond is experience rated. This means the bond is for catastrophic losses and you will pay a higher premium for six years because of the loss. Finally, the insurance companies will not settle this type of loss easily and they may want the transit letter totally reconstructed.