The term “forged check” is often used to describe a check on which the drawer’s signature is forged or unauthorized. Such a check is meaningless as far as the drawer whose signature is forged is concerned.
The drawee bank that pays a forged check is generally responsible for the resulting loss. A counterfeit check has been regarded as the equivalent of a forged check.
The forgery of a person’s signature typically imposes no liability against the forgery victim. Still, the forger is liable as a signer of the instrument, even where he signs in a name other than his own.
An alteration might be loosely depicted as any modification of the writing on a check made without the permission of the drawer or any other party to the check, such as an endorser. A material alteration may consist of raising or otherwise altering the amount of the check, altering the name of the payee (the individual to whom the check is given), or making other modifications on the check.
These include to the date or to the name of the drawee (the individual from whose bank account the check is withdrawing funds) or payor bank. In most circumstances, checks are modified for fraudulent purposes.
In general, alterations to the check that do not modify the contract that the check is a representation of are not material. For example, due to the widely-followed rule that words control numbers on ambiguously written checks, there is no alteration when one changes the number of check in numbers without changing the written-out amount.
The law generally places the burden of establishing the existence of the material or improper alteration on the individual seeking to avoid liability on the check. Many courts suggest that the burden might be the other way around where there is an alteration.
In other words, where there is visible evidence of alteration, a bank or holder could not claim not to be aware of the alteration.
In good faith and without noticing the alteration, a person taking an altered check for value may enforce their rights concerning the check in its original state.
The federal penalties for check kiting include fines of up to $1 million, and up to 30 years in prison.
The punishments for other forms of check fraud tend to vary from state to state, but they are usually quite severe.
It should be noted that the vast majority of laws that define check forgery and related offenses include intent to defraud as an element of the crime. This technically means that a person could engage in all of the overt acts which constitute check forgery, but if they did not engage in them with the intent to defraud anyone, they are not guilty of the crime. Of course, courts and juries are not psychic, so it’s impossible to tell with any certainty what was going through a person’s head the moment they committed a crime. Accordingly, such intent can usually be inferred from the defendant’s actions in committing the crime, and possibly through past conduct or statements.
Typically, a bank that makes a payment to a holder in good faith may charge the indicated account of the bank’s customer according to the original terms of the altered check. If a check originally issued for $25 is raised to $2,500 and is paid in the raised amount, the bank may charge the drawer’s account, but only for the original $25 amount.
A bank paying a forged check may not charge the check amount against the account of the person whose name is forged. The drawee or payor bank must bear any loss resulting from the payment of a forged check.
Most states have a statute of limitations or time limit by which you must file a claim against a bank for processing forged checks. Generally, the time limitation for filing a suit runs from the date the depositor demands the bank reimbursement for the amount of the forged checks. Depending on the state, the depositor has one or two years to file his suit.
This question may be better expressed as two separate questions:
In both cases, the plaintiff bears the burden of proof.
A financial lawyer is a specific type of lawyer who assists people regarding legal issues related to finances. Having a financial lawyer is essential for many different reasons.
As mentioned, some areas of finance can be complex, and the laws surrounding them may need the research and interpretation of a lawyer. This can span a range of different subjects, including financial plans, financial responsibility laws, and even financial power of attorney arrangements.
Typically your bank’s forged check policy is outlined in the information packet they give you when you open an account with them. If it is not, or your bank refuses to answer questions about a potential forged check, you may wish to contact a finance lawyer who can speak with the bank and figure out the best course of action.
If you are being sued for altering a check, or you believe your bank has processed a check that has been clearly and wrongfully altered, you should contact a financial lawyer immediately. Both have serious consequences on the criminal and civil sides of the law.
Other areas that may require the assistance of a financial attorney can include:
Also, financial planning lawsuits can be common as well. These typically involve some form of misconduct by a financial planner. Claims can involve negligence, fraud, or misrepresentation on the part of a financial planning expert. For instance, a financial advisor may have obtained access to a client’s trust fund and then used some funds for personal use. These types of claims can involve complex determinations under state and federal laws.
In many cases, it is useful to find a financial lawyer before you even enter into a new financial arrangement or agreement. This can help provide you with guidance and protection as you make new financial decisions, work with new financial advisors, and take new steps in your financial planning.
An attorney can help you draft, review, and file documents and explain your legal rights at crucial steps. Then, if a financial dispute or legal conflict arises, your attorney will be familiar with your financial background and can provide legal representation much more effectively.
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