A customer has had a remotely created check clear her account twice. What is the proper Regulation CC language to submit this type of claim?
Presumably, the customer is claiming that he or she did not authorize the issuance of the remotely created check (RCC). If that is the case, you will need an affidavit from the customer stating that he or she did not authorize (1) the issuance of the check (2) payable to the named payee (3) for the dollar amount stated on the RCC. All three elements need to be in the applicable sentence of the affidavit.
If you received the check from the Fed, and you are still within ninety calendar days from the date of the cash letter in which the check was first presented to you for payment, you can use the Fed's Check Adjustments service (see Operating Circular #3 and the Fed's "Check Adjustments Quick Reference Guide for details), and you should receive credit for the item on the next business day. If you can't use the Fed's adjustments service, you can send a claim directly to the depositary bank citing a breach of the warranty provisions of Regulation CC, Section 229.34(d). In your claim, note that the depositor stated that he/she did not authorize the (1) issuance of the check (2) payable to named payee (3) in the dollar amount stated.
When you deal directly with the depositary bank, that bank may raise a defense to your claim if it believes you didn't have to honor your customer's claim against you under UCC 4-406. If the depositary bank rebuffs your claim or ignores it, you may have to decide whether to bring the claim to court. That could easily cost more than anything you could recover.
First published on BankersOnline.com 3/08/10