I hope everyone has a Halloween filled with more treats than tricks! Speaking of tricks, what happens when a credit union receives a check that has double the forgery? For example, the drawer’s signature AND the endorsement are both forged.
Generally, check transactions are governed by Article 4 of the Uniform Commercial Code (UCC), which is adopted individually, as state law. Please keep in mind that every state may have adopted a version of the UCC that differs from the Model UCC, so make sure you check your state’s laws before proceeding! However, the information I am going to provide is based off the Model UCC.
Forged Drawer’s Signature
“If an item is presented to and received by a payor [credit union], the [credit union] is accountable for the amount of:
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