CONTENT

  DEPARTMENTS



  DETAILS
Legend for Icons
 Article    Q&A

 Podcast  Video

 Blog  Discussions

PDF    Powerpoint
BankingQuestions.com Web

  Home >> Accounts >> Business Accounts  
Forgery at the Teller Window

When a non-signer on a business account is allowed to forge a signature and receive money back and cash checks repeatedly, is the bank responsible for reimbursement?


That's a difficult question, because there's no way to answer it without knowing more background information. A bank shouldn't ever permit a business -- except a sole proprietorship -- to take "cash back" from a deposit. There is simply no viable way to know whether the individual presenting the deposit has the authority to cash checks payable to the business (cash back is tantamount to cashing the check(s)), unless the bank is dealing with a sole proprietor, but when a pattern develops such as the one you've asked about, a bank might argue that the business ratified the individual's conduct by not objecting to it.

Published on BankingQuestions.com 11/09/06