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Home >> Checks/Money Orders >> Checks You Received
Check for $15,000; Bank Credits Only $5000
We deposited a check to our business account. The written amount was for $15,000, however, the numerical amount was partially obscured and the bank only credited us with $5,000. The check cleared the drawee bank for the $5000. When we discovered the mistake and notified the bank, the bank credited our account with the balance of $10,000. Over 60 days later, the bank took the $10,000 back allegedly because the check writer's account was, by then overdrawn. Is our bank allowed to do this or must they return the money to our account. If there are applicable UCC sections, please provide me with this.
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 When there is a discrepancy between the two amounts on a check, the amount expressed in words controls (UCC §3-114). In this case, the amount of the check was ambiguous, but the correct amount appears to have been $15,000, and you were correctly credited in two steps, with that amount.
Your bank encoded the wrong amount on the check. When it did so, it warranted to the paying bank that the encoded amount was the correct amount. That means that, although your bank could correctly attempt to obtain an adjustment for $10,000 from the paying bank, the paying bank would not be required to make that adjustment if the account on which the check was drawn didn't have sufficient funds. (§4-209)
Assuming that the paying bank notified your bank of its intent not to make the adjustment requested, your bank's warranty would make it accountable for the error as between the banks involved (§3-114). Whether or not your bank correctly charged the $10,000 back to your account is a matter that may be addressed in your bank's deposit contract.
Retain all documents you have received that relate to this check. If you are able to document the fact that you ultimately received only $5,000, you may have a legal claim against the issuer of the check or your bank for the balance. Consult with an attorney to determine what your options are.
Published on BankingQuestions.com 9/04/08
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