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Bank Liability for Forged Signature Check

If my bank cashes a check drawn on my account having a forged signature what is the bank's liability?


Provided you are diligent in promptly reviewing your bank statement and call the forgery to the bank's attention right away, you should be reimbursed for the amount of the check, because the bank had no authority to pay it. You will likely be asked to sign an affidavit stating that you didn't sign the check, don't know who did sign it, and received no benefit from the check.

If it's an isolated instance, that is the way things should work. However, if there are a number of similar forgeries and you fail to notify the bank promptly after you should have learned of the first one, you might have to share in the liability for the checks. Published on 6/13/07