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What is Bank's Liability for Stolen Checks?

How long must a bank honor reimbursement for forged checks? My 17-year-old goddaughter stole blank checks from my home. I found out four months later that she had been stealing and forging these checks. So far, ten checks were found that were cashed in this county that are in the current police report. She has only been charged with four; yet she will supposedly have to pay the amounts on those ten checks if convicted. When the bank was sent the police report, they only sent copies of those original four checks. She was arrested, and the case is currently going through hearings while she is out on a signature bond. She took the first book of checks while offering to help clean my house while I was recovering from cancer surgery; the second, an entire new box, was taken directly from my mail.

The bank at first said they were liable, but now says they are only liable for thirty days after a check was cashed. The checks were cashed from early August to December, 2008. These were reported to them from December, 2008. Now, and since some of them were automated, not all have been found, as this matter had to be turned in to several police departments before it could be actually proven. Many of the blank checks that were not yet cashed could not yet be actually documented as stolen. All numbers of checks I found had been stolen. I stopped payment on these, although it was too late for the ones already cashed. When I could get to the bank, I closed the account altogether.

Now I'm wondering how much reimbursement I should expect from the bank. My goddaughter’s writing is very different from mine. The case in one county is still being looked at while she has not yet been charged in another county and state. They said they must wait until the first county is done. My question remains: is the bank still liable for the cashed checks?


Let's separate the bank's potential liability from the criminal cases against this teenager. In the end, whether she stole from you or from the bank, she stole money, and she will have to answer for it.

As to the bank, it is protected by a provision of the Uniform Commercial Code. That's a body of law that is adopted by all of the states in mostly the same form. One provision of the UCC states that, when a single wrongdoer is involved in a series of forgeries, a bank is liable to its depositor for the amounts of forged checks cashed up to 30 days after the bank made available to you the first statement on which one of the forged checks appeared. The 30 day period is to allow you time to open and read the statement and reconcile it, identifying any unauthorized items. You have a responsibility to review the bank statement promptly. Unauthorized checks cashed that are forged by the same wrongdoer after the end of that 30 day period are the responsibility of the depositor, who could have prevented the losses by timely notification to the bank.

Published on BankingQuestions.com 3/11/09