Related sites: Scams | Most Common | Detection | Prevention | Help and Liability
Under Construction

Liability - Responsibility:
Uniform Commercial Code (UCC) Changes (Articles 3 and 4 rewritten in 1990)

  • Changed long-held premise that banks were solely responsible for losses resulting from fraudulent checks.
  • Liability for check fraud can now more easily be apportioned between banks and clients relative to a determination of fault
  • Company and drawee bank must exercise "ordinary care" – adherence to reasonable commercial standards
  • Negligence on the part of either party may make it liable for part or all of the losses resulting from check fraud
Banks’ compliance with Reg CC to make funds available
  • Within one day for certain types of checks
  • Two days for checks drawn on a local bank
  • No longer than five days for non-local deposits
* Reg CC - Fed. Reserve Board Regulation CC, Availability of Funds and Collection of Checks. Source: Fraud Prevention Strategies at Georgia Tech (powerPoint)

last updated 10 July 2009