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Home >> Scams/Fraud
What Does 'Share in the losses' Mean?
I read your information about being victim of a forged check. When you say the bank should "share in the losses" if victim failed to report in a timely fashion, what does that mean? Our bank is offering to reimburse us $1100 out of $25,000 that was forged from our account. Is there anything we can do?
My wife and I had $25,000 written in forged checks from our joint checking account and are prosecuting our daughter for it. Since we did not pick it up right away, the bank is only giving us restitution of $1100. The bank and our account was in Northern Kentucky. We wrote a letter to a major bank executive locally and have had no response.
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 Whether or not the bank is liable to you for forged checks on your account will depend on whether the forgeries were committed by the same wrongdoer, and how quickly you reported the unauthorized transactions to the bank.
The Uniform Commercial Code puts the responsibility for account and statement verification squarely on the account holder's shoulders when there is a series of forged items in question. The account holder must promptly notify the bank of altered or unauthorized items, in order to help the bank stem the flow of additional forgeries. Your deposit contract may set a time period by which you have to contact the bank. The law puts an outside limit on such notification at thirty days after delivery of the first statement showing the payment of a forged item. The customer is liable for items forged by the same wrongdoer after that period.
If we assume that the first forgery took place in January, 2009 and your bank statement for January was available on January 31, you'd be responsible for any item forged by the same wrongdoer after March 2. If the total of forged items in January, February and the first two days of March is $1,100, that's the amount for which the bank is responsible. In essence, the law penalizes you for delay in examining the checks paid on your account because you had an opportunity to prevent those further losses.
There may be mitigating circumstances that could allow you to argue that some of your liability should be pushed back on the bank. Check with an attorney to see if you have an opportunity to try to recover additional funds.
Published on BankingQuestions.com 6/16/09
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