Stolen or Forged Check?
Navigating Your Legal Rights

The Scenario: When a Check is Stolen or Fraudulently Cashed

Dealing with a stolen or fraudulently cashed check is frustrating. This article addresses the common situation where a check intended for you is intercepted and cashed by another party. We'll explore your rights and what steps you should take.

Case Study: A Real-World Example

Consider this: You trade in a car and expect a refund check for GAP insurance. The check is issued but doesn't arrive. After inquiry, you discover the check was cashed, bearing a forged signature. This is a common issue, and you're not alone.

Your Rights: Understanding the Legal Framework

Under the Uniform Commercial Code, the bank that cashed the forged check is generally liable. Because the check was payable to your order, your signature was necessary for negotiation. The thief's forged signature does not pass title. The payor bank must recredit the drawer's account, and can then seek recourse against the presenting bank.

The dealership is responsible for reissuing your check immediately. They have the ability to seek remedy from their bank, and as their customer, you should not have to suffer any delay.

In essence, you are protected by law.

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The payor bank must recredit the drawer’s account.

Uniform Commercial Code

Taking Action: What to Do Next

Immediately contact the check issuer (e.g., the dealership). Demand a replacement check. If the issuer is uncooperative, consider consulting with an attorney. A legal professional can guide you through the process and ensure your rights are protected. Gathering documentation, such as the copy of the forged check, is crucial.

Need Legal Assistance? Pardalis & Nohavicka is Here to Help

If you have questions or need assistance with a stolen or forged check, we're here to provide expert legal guidance. Contact us at 212-213-8511 to discuss your situation and explore your options.