Under Construction |
Liability - Responsibility:
Uniform Commercial Code (UCC) Changes(Articles 3 and 4 rewritten in 1990)
Banks’ compliance with Reg CC to make funds available
- 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
* Reg CC - Fed. Reserve Board Regulation CC, Availability of Funds and Collection of Checks.
Source: Fraud Prevention Strategies at Georgia Tech (powerPoint)
- 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
last updated 10 July 2009