returned check 40 days later

[Mike Lenz]

What is the name of your state? IL
I deposited a check for a down payment on some equipment Im selling and the bank took it back out of my account 40 days later, something about the federal reserve bank losing it as it was being returned. I made a stink and quoted some regulations I looked up about the 2/4 day rule concerning a returing check and they put it back in my account. 35 days later they took it out again and this time they said it was returned because it was unsigned (which come to find out it was) along with an affidavit that the payor intentionally left it unsigned so it couldnt be cashed. Again wasn't the payor bank required to return it more promptly than that? I always thought my money was safe in a bank but here I am arguing with the bank about a deposit I made Nov 23! If there are no set hard time rules on taking money back out of a bank account Im not so sure they are a safe place for cash! Is my bank in the wrong here?What is the name of your state?

[Debt Guy]

As to the first issue, I think you were correct to challenge your bank. The fact that they credited the account demonstrates they were wrong. There are very strict limits to the time for returning an item.

As to the second issue, most likely the maker of the check disputed the item back to the maker's bank who then returned it back through the system. My belief is that they have very flexible time limits for that type of return. I have seen items returned between 90 and 180 days after -- it all depends on when the maker disputes.

Clearly, if the check was not signed, then the maker's bank was right to return it. They had no choice.

You should not have accepted and deposited a check that was not signed. It looks like the maker set you up for failure. You probably have legal recourse against the maker and you may wish to speak with an attorney.

Your question goes to what obligation does the maker's bank have to return the check faster. Well, as a practical matter, no bank looks at signatures on checks these days (unless the amount exceeds a dollar threshold -- say $25,000). There are just too many paper checks cleared every day to put eyeballs on the checks.

I'm not the expert on banking these days. You might want to send a private message to Veronica if she does not post on this.

[Veronica1228]

Originally Posted by Debt Guy

As to the first issue, I think you were correct to challenge your bank. The fact that they credited the account demonstrates they were wrong. There are very strict limits to the time for returning an item.

As to the second issue, most likely the maker of the check disputed the item back to the maker's bank who then returned it back through the system. My belief is that they have very flexible time limits for that type of return. I have seen items returned between 90 and 180 days after -- it all depends on when the maker disputes.

Clearly, if the check was not signed, then the maker's bank was right to return it. They had no choice.

You should not have accepted and deposited a check that was not signed. It looks like the maker set you up for failure. You probably have legal recourse against the maker and you may wish to speak with an attorney.

Your question goes to what obligation does the maker's bank have to return the check faster. Well, as a practical matter, no bank looks at signatures on checks these days (unless the amount exceeds a dollar threshold -- say $25,000). There are just too many paper checks cleared every day to put eyeballs on the checks.

I'm not the expert on banking these days. You might want to send a private message to Veronica if she does not post on this.

Hi, Debt Guy. My ears were burning!

The Fed Reg for returned checks state that an original check must be returned within 2 business days after it is deposited. However, if it is a photocopy in lieu of the original (usually indemnified) because the original was lost or destroyed during processing then they have up to 6 months to return the check. It sounds to me that this would be the case with the OP's first issue.

On the second return, if it is a fraud issue, the Reg for returned checks does not apply. You are correct that most checks are processed by machines or electronically since Check 21 was enacted. The signature is not verified unless the owner of the account the check is drawn from makes a claim of fraud or forgery. The owner of the account may not notice the item in question until after their statement cuts and they receive it in the mail. Therefore, the 35 days it took for the OP to receive the check back sounds about right to me.

It sounds to me like the OP's bank did everything by the book.

[Mike Lenz]

Thanks Veronica (and Debt Guy). Its not the answer I wanted but at least I know the truth now.
Mike