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Home >> Scams/Fraud
Son Forged Check
My son, with whom we've had problems (drug, steal money from wallet and purse) has forged several checks on us. The amount is about $8,000.00, around 20 checks. I have filled out forgery affidavits, sworn out a warrant for my son's arrest. He is in jail now. I went to the bank to see about getting my money. The bank is saying since I did not report this within 60 days they have no liability and will not refund my $8,000.00. The first forgery was April 17, 2006, 4 other checks were forged in April. The bank showed me where my statement dropped on May 5th, and they say since I did not notify them in a reasonable time and more than 60 days has elapsed, I forfeit my rights according to the Bank's Deposit Agreement. I notified them on July 14th. They also said something about some rights in 30 days. What can I do? I cannot afford to lose $8,000.00. Help!
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 We cannot imagine the pain you must be suffering knowing that your son has deliberately stolen from you. That you were driven so far as to put him in jail for his theft gives us an inkling of the depth of the emotions that must have torn at your heart, although we're sure that it was his involvement with drugs that drove him to such desperate acts. It may give you, and others reading this, a small measure of comfort to know you're not the only family that has endured similar struggles. This is a scenario we hear all too often. Those of you reading this who have family members who may, due to drugs or whatever other reason, be tempted to steal, need to take precautions with your blank checks. See this BankingQuestions.com Banking Blog post for suggestions.]
We don't believe that the picture is quite as bleak as your bank seems to have painted it. You told us that the first bank statement that showed any of the forged checks was issued on May 5th. The fact that your bank appears to have mentioned something about "rights" and 30 days leads us to believe the bank thinks it has some liability to you.
Under section 4-406(c) of the Uniform Commercial Code (UCC), you as a bank depositor have a duty to check your bank statements promptly for forgeries, alterations, or other unauthorized charges to your account. "Promptly" generally means as soon as reasonably possible, but not more than 30 days after the statement is made available to you. If you miss that 30-day deadline, any forgeries by the same person that are paid by the bank after the 30-day period are generally the depositor's responsibility.
Basically, when there is one forger involved in a series of unauthorized checks, the UCC attempts to recognize that the depositor isn't in a position to prevent future forgeries until he becomes aware of the first one. That usually cannot happen until the depositor gets a bank statement with the forged checks (or at least showing that unauthorized checks have been paid). The law even allows that 30-day "window" to complete the statement examination, but after that period, the law assumes the depositor had an opportunity to know of the forgery and prevent future thefts, so the bank should not be "on the hook" for forged checks after that period and before you notify the bank. That means you should probably not expect to get back money for any forgeries that posted on your account between June 5 and July 14.
We recommend you go back to your bank and tell them you wish to claim reimbursement for any of the forged checks that posted to your account on or before June 5. That should cover all of the checks that showed up in your May 5 statement, and perhaps some on the June 5th statement, too. Be prepared to mention "UCC section 4-406(c)" to the bank representative, and for the bank to need some time to consider your request. It's likely that a reimbursement of this size may need approval from a higher management level in the bank's organization.
Keep in mind that there may be a couple of things that could change who's liable for these. The UCC allows a bank to vary most of its provisions by agreement of the parties. For example, your bank may have established a shorter time period for you to examine your statement. You'll need to take a look at your deposit account agreement to know if that's the case. Also, the bank could shift some of the loss to you if it could show that you were negligent in a manner that substantially contributed to the making of the forged signatures.
One last thing – the specific wording of the UCC can vary from state to state. Although it's likely that your state has the same rule as the one we've described above, there may be some variation from the "standard language."
Published on BankingQuestions.com 8/08/06
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