|
 |
Home >> Checks/Money Orders >> Checks You Wrote
Check Altered and Cashed
I am the vice president of a non-profit organization and I recently discovered that a check written in October 2006, was cashed after the date and the "payable to" line were changed. Is this considered fraud? What recourse do I have?
|
Untitled
|
 Yes, the alteration of the date and payee information on the check is most certainly fraudulent. Whether your organization has any recourse will depend on how much time has elapsed since the check was paid by your bank.
Many non-profit organizations lose money because of loose controls over their accounts. After all, a lot of the good people who volunteer for these organizations want to trust other people, and might not be as concerned about financial controls as the chief financial officer of a major corporation, not that big corporations are immune to fraud. One of the most frequently ignored controls in non-profit organizations is a separation of responsibilities -- the individual who signs or mails checks for the organization should not receive, review or reconcile bank statements. The second most frequently missed control is a prompt review of each bank statement and the items posted to the bank accounts.
There are two deadlines that are important to you. The first is a deadline in the law for making a claim for wrongful payment of an altered check. That deadline is one year from the date of the statement that shows the payment of the check.
The second deadline is usually found in the bank's deposit contract, and it establishes a shorter window for examining items in a bank statement and reporting unauthorized or altered items, including checks. That deadline may be as long as 60 days, and it may be as short as 14 days from delivery of the statement. If the alteration of the check should have been obvious to the bank, the contractual (14 to 60 day) deadline may not stand up in court, if you have to bring your complaint there for resolution.
Regardless of the deadlines, don't waste time in contacting your bank to call the alteration to its attention. You may be fortunate enough that the bank will reimburse your organization without any hassle. Banks are reluctant to incur negative publicity; however, depending on the size of the check and any delay in notifying the bank, you may find some reluctance on their part.
Published on BankingQuestions.com 6/05/08
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
