When a third party check is deposited and the bank suspects forgery of the endorsement, does the bank pursue legal charges or is it up the person who was affected by the forgery (the third party on the check) to report that he or she suspects that they are a victim of forgery/fraud?
The action starts with the party whose signature was forged. That party normally contacts the check issuer because the payment due was not completed. Then the check issuer starts a claim on the bank on which the check was drawn, which works its way back to the bank that accepted the check for deposit or cashed it. That bank either absorbs a loss or collects from the party that got credit or cash for the check (usually the forger).
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The action starts with the party whose signature was forged. That party normally contacts the check issuer because the payment due was not completed. Then the check issuer starts a claim on the bank on which the check was drawn, which works its way back to the bank that accepted the check for deposit or cashed it. That bank either absorbs a loss or collects from the party that got credit or cash for the check (usually the forger).
