Bank failed to verify the fake check and we lost money!

[scarletts]

We opend a business account in Chase Bank.
On Dec. 15th 2014, the fraud people used 2 fake checks to steal about $11,000 from our business account.
Even our mailing address on the fake checks is printed wrong.Chase still failed to verify this and let the fraud people cash the money.
But now, Chase refused to refund us the money saying we reported the fraud too late. (March 9th, 2015.)
So what could we do?　If we file a claim on Chase to the court, will we win the case and get the funds back?
Please advise. Thanks for your help!

 

[Zigner]

We opend a business account in Chase Bank.
On Dec. 15th 2014, the fraud people used 2 fake checks to steal about $11,000 from our business account.
Even our mailing address on the fake checks is printed wrong.Chase still failed to verify this and let the fraud people cash the money.
But now, Chase refused to refund us the money saying we reported the fraud too late. (March 9th, 2015.)
So what could we do?　If we file a claim on Chase to the court, will we win the case and get the funds back?
Please advise. Thanks for your help!

What state did this occur in?

 

[scarletts]

What state did this occur in?

Houston, TX

 

[Ohiogal]

We opend a business account in Chase Bank.
On Dec. 15th 2014, the fraud people used 2 fake checks to steal about $11,000 from our business account.
Even our mailing address on the fake checks is printed wrong.Chase still failed to verify this and let the fraud people cash the money.
But now, Chase refused to refund us the money saying we reported the fraud too late. (March 9th, 2015.)
So what could we do?　If we file a claim on Chase to the court, will we win the case and get the funds back?
Please advise. Thanks for your help!

Why did it take you THREE months to report it?

 

[scarletts]

Why did it take you THREE months to report it?

Tax season. Lots checks go out.
BTW the fake checks show the "Absence of endorsement is guranteed by payee's bank", which is not Chase.
So does the payee's bank have the responsibility? Could we sue the payee's bank as well?

 

[Zigner]

Tax season. Lots checks go out.
BTW the fake checks show the "Absence of endorsement is guranteed by payee's bank", which is not Chase.
So does the payee's bank have the responsibility? Could we sue the payee's bank as well?

I doubt you have a case against either bank.

 

[scarletts]

I doubt you have a case against either bank.

Why couldn't we? The checks are fake even our mailing info were wrong.

It's not the check stolen or lost. It's totally fake. None of our signatures on it.

The bank still let them cash the money without our permission.

We also reported the fraud people's account info to the police. Does that work?

 

[Zigner]

We also reported the fraud people's account info to the police. Does that work?

It might - but I wouldn't count on recovering the money.

Have you reported the theft to your insurance company?

 

[PaulMass]

Ask a lawyer familiar with the Uniform Commercial Code.

 

[Proserpina]

Why couldn't we? The checks are fake even our mailing info were wrong.

It's not the check stolen or lost. It's totally fake. None of our signatures on it.

The bank still let them cash the money without our permission.

We also reported the fraud people's account info to the police. Does that work?

The delay in reporting might matter.

See an attorney.

 

[justalayman]

while it may be too late in attempting to recover the money from the banking system (I don't' know at the moment; haven't checked) it would not prevent the crimes involved from being prosecuted. If they culprits are caught you would be able to sue them civilly as well as seeking restitution as part of the criminal penalty. You should report this to the police.

 

[single317dad]

One problem is that checks can come from just about anywhere legitimately. Many companies will print checks for you; they don't have to come from your bank (in fact, your bank probably uses a third party check printing service). Your name and address don't have to be accurate for the check to pass.

If the transaction had been electronic, the EFTA would apply, and you would have had 60 days from the date of the erroneous statement to complain:

https://www.consumer.ftc.gov/articles/0218-electronic-banking

You have 60 days from the date a periodic statement containing a problem or error was sent to you to notify your financial institution. The best way to protect yourself if an error occurs is to notify the financial institution by certified letter. Ask for a return receipt so you can prove that the institution got your letter. Keep a copy of the letter for your records.

Under federal law, the institution has no obligation to conduct an investigation if you miss the 60-day deadline.

One would imagine there is a similar rule regarding paper check transactions. If so, it will likely be found here:

https://www.law.cornell.edu/ucc/3

The Consumer Financial Protection Bureau assist consumers who believe they haven't been treated fairly by financial institutions; I do not know if they will assist a business, but it's worth a phone call.

 

[czm8kz]

If the transaction had been electronic, the EFTA would apply, and you would have had 60 days from the date of the erroneous statement to complain:

https://www.consumer.ftc.gov/articles/0218-electronic-banking



One would imagine there is a similar rule regarding paper check transactions. If so, it will likely be found here:

https://www.law.cornell.edu/ucc/3

The Consumer Financial Protection Bureau assist consumers who believe they haven't been treated fairly by financial institutions; I do not know if they will assist a business, but it's worth a phone call.

The 60 day rule for consumer disputes does not apply to business accounts. There are other options, but chances are slim. Chase has a competent fraud department, but recovery so long after the incident is not likely through the bank chargeback system. If you can find the individuals who negotiated the fraudulent items, go after them to the full extent of the law.

 

[PaulMass]

See UCC 4-406(f)

Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year after the statement or items are made available to the customer (subsection (a)) discover and report the customer's unauthorized signature on or any alteration on the item is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this subsection, the payor bank may not recover for breach of warranty under Section 4-208 with respect to the unauthorized signature or alteration to which the preclusion applies.