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Bank Cashes Check Twice: Denies Responsibility

My bank cashed the same check twice against my account, once electronically and once by physical presentation. They then denied responsibility for recovery, because checking to see if a check has already been cashed once isn't part of their procedure. I pointed out that once cashed electronically, the back of the check is endorsed by the payee and the bank should be responsible for ensuring a proper signature. Had they checked, they would have found it. My bank told me that they didn't often check for signatures. What is their responsibility in this case?


It used to be that you signed a check once, it was paid in its original form once, and you were done. Today, with image exchange enabled by the Check 21 Act and in some cases check conversions to automated clearing house (ACH) electronic format, the likelihood that a check might get paid in more than one form has increased, in spite of attempts to improve controls.

However, one thing has not changed. Your authorization when you write a check is only good for one payment. That means your bank only has an authorization to charge your account one time, and you are entitled to a refund, assuming that you called the error to the bank's attention promptly.

Because all three formats your check can take, original, ACH and image, are supposed to include your check serial number, many banks have begun using systems able to detect when the same check number is processed more than once. Your bank apparently hasn't made that change, yet. However, your bank is able, now that it is aware of the error, to reverse the electronic payment, assuming you notified it promptly. Put your complaint in writing, and refer to the Federal Reserve System's "PAID" adjustment request, and the Automated Clearing House's R37 or R53 return entries.

Published on 7/07/09