Immediate Actions Take Action Immediately
Discovering a stolen and cashed check is distressing, but prompt action is crucial. Your first call should be to your bank's fraud department to report the unauthorized transaction and prevent further misuse. This is essential for initiating the recovery process.
Next, file a police report to create an official record of the theft. The police report is often required by your bank for their investigation and claim process. This establishes a clear timeline and documentation of the fraudulent activity.
Claim Information Needed for Your Bank
Gathering the necessary information streamlines the claim process with your bank. You'll need specific details to support your case and expedite the recovery of your funds.
Essential information includes the check number, the exact amount of the fraudulent transaction, and the date it occurred. Also, have the name of the original payee ready, along with a copy of the cashed check (front and back) provided by your bank, and the police report number.
Bank The 's Formal Claim Process
The bank's claim process centers on your sworn statement that you did not authorize the transaction. This is usually documented via an 'Affidavit of Check Fraud,' where you attest, under penalty of perjury, that the endorsement on the check was forged.
Banks have varying procedures for submitting the affidavit and supporting documents. Some require in-person visits, while others offer mail or secure online portal options. Follow your bank's specific instructions to ensure a smooth claim submission.
“Immediate reporting of check fraud is key to preventing further loss and initiating the recovery process.
LegalClarity Team
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Fraud Checklist
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Financial Liability Who is Financially Liable?
The Uniform Commercial Code (UCC) outlines who bears the financial responsibility in check fraud cases. Under the UCC, the depository bank (the bank that accepted the forged check) is liable because they are responsible for verifying valid endorsements.
Your bank, the payor bank, is generally responsible for refunding the money to your account because a check with a forged endorsement is not considered 'properly payable.' As the account holder, you are protected as long as you weren't negligent, for example, signing a blank check or delaying the fraud report.
Timeline Investigation & Reimbursement
The reimbursement timeline varies depending on how the fraudulent check was processed. For electronic fund transfers, federal law (Regulation E) provides consumer protections, with a 10-business-day investigation window.
If more investigation time is needed, the bank must issue provisional credit, up to 45 days. For traditional paper checks, the UCC governs; there is no specific provisional credit timeline, which can cause reimbursement to vary by bank. Keep in contact with your bank.