Compliance Advisor

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Question: We have an account holder claiming a check paid against his account has an altered date. He said he already paid the money more than 6 months ago to the payee thinking the check was lost. In reviewing the check, the date was clearly altered by nearly 9 months. Had it not be altered, it may have been treated as a stale dated check. Who is obligated to pay?

Answer: A maker’s bank is liable to the maker of a check, and may not charge a check to the account of the maker, if that check has been altered according to §3.407(b) of the Uniform Business & Commerce Code.

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(a) "Alteration" means (i) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party, or (ii) an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party.

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The maker is responsible for the check only as it was originally drawn. This is known as a presentment warranty and allows a check to be returned after the midnight deadline (bank to bank without entry) under a claim for breach of that presentment warranty. The bank of first deposit does have a number of rebuttable defenses it can make including the negligence of the maker.

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