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Ex-employee Forges Signature Card: Bank OKs
An ex-employee forged her name and another employee's name on a signature card and the bank accepted it. Does the bank have any liability in this case, as numerous checks have been forged with her name? Is there a time limit for filing these charges, if any?
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 It is assumed that the account affecting is your business account, and that checks drawn on the account were issued with the unauthorized signatures. The bank had a responsibility to obtain authorization from the business before adding signers on the account. That authorization should have been in writing, signed by an official of the business. Apparently, that documentation was not obtained, so the bank has essentially paid checks with unauthorized signatures.
The bank depositor, you or your business, has a responsibility to complete a timely review of bank statements to identify unauthorized items. The bank can refuse to reimburse the business for unauthorized items paid after you've had a reasonable time to identify the first such item. Reasonable can be defined in the deposit account agreement, but it's not more than thirty days.
If the first unauthorized check was paid on 1/15/09 and a bank statement showing the payment of that check was made available on 2/3/09 (mailing date), you'd be expected to identify the unauthorized check and report it to the bank by 3/5/09. The bank would be responsible for reimbursing you for any of the unauthorized checks paid from 1/15/09 through 3/5/09 or an earlier date on which you made your claim; the bank would not be responsible if it paid items after 3/5/09 if you failed to notify the bank of the unauthorized signatures until after 3/5.
Published on BankingQuestions.com 3/26/09
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