A customer sent me a check that I never received. It has cleared his account. I filled out fraud paperwork, but I'm frustrated by the length of time it is taking. Is his bank negligent for not verifying the lack of an endorsement and/or verifying that it went into the account for which it was intended?
No, the paying bank isn't negligent. The law permits checks to be deposited without an endorsement, although a prudent depositary bank usually requires an endorsement for its customers, with certain routine exceptions. If the endorsement was forged by an impostor, you bank would not be able to detect the forgery. Now that the paying bank knows that the endorsement was forged or otherwise improper, it has a claim against the depositary bank, and getting the claim resolved takes time.
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No, the paying bank isn't negligent. The law permits checks to be deposited without an endorsement, although a prudent depositary bank usually requires an endorsement for its customers, with certain routine exceptions. If the endorsement was forged by an impostor, you bank would not be able to detect the forgery. Now that the paying bank knows that the endorsement was forged or otherwise improper, it has a claim against the depositary bank, and getting the claim resolved takes time.
