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Late Return of a Check, can the Bank Take the Loss

I deposited a check to my account. The check was paid normally and after that I made several withdrawals. After more than forty five days the bank manager called me, telling me that the check was not paid to them and that it was going to be "return to maker."

The bank put a hold on my account and is making me responsible for the resulting loss and/or liability. I argued with the bank manager about how late this check was in being returned. After a few days the bank manager called me again telling me that the bank accepted it as a late return and that they were going to put a claim against the issuing bank, but that my account was going to be kept on hold until it was settled. I didn't agree with this and I filed a claim in court against my banker requesting my balance be returned to me due to the fact that it was a late return.

My question is, who should be held responsible, me, my bank, the issuing bank, or the endorser of the check? What probability do I have to succeed on my claim in court against my banker?

From the sound of things, the bank probably told you the check was being returned, marked "refer to maker." That's a catch-all and less-than-informative reason for returning a check.

Forty-five or more days for a round trip to and from the bank a check is drawn against does seem inordinately long. One might expect such a delay if the check were drawn outside the U.S., but everything else in your scenario sounds like a U.S. bank is at the heart of this.

There are other legitimate reasons for a check to take a long time on its journey. Transportation delays, misrouting of the check, a mechanical equipment jam -- all have been known to delay checks as they are delivered to the paying bank (or return from there). Your bank has apparently entered a late return claim, and is now awaiting information from the paying bank about when the check was received there and sent back.

If the paying bank indeed held on to the check too long before returning it, you and your bank have every right to your claim of late return. The paying bank should take the loss (unless it can shift it back to its customer, who wrote out the check in the first place), but it may be too early for you to have filed your court claim without knowing if the return was, in fact, late.

If you deposited the check to a checking account, your bank is limited in the length of hold it can place, while it awaits information on the check. However, some banks would have deducted the amount of the check from your account, even before it physically arrived back from the bank it was drawn on.

If your account is a savings account, most states do not have a limit on the length of a hold. We can't speculate on the chances of your success in the court case without knowing whether, in fact, the check in question was returned late.

Published on 1/18/07