Victim of forgery may have to prove bank was wrong to cash the check

Q: My daughter wrote a check to herself on my checkbook for $3,000 and forged my name, and the bank cashed it. This caused other checks to bounce. The bank says it’s not their fault, and won’t reimburse me, but aren’t they responsible for making sure the signature on the check is really mine?

A: Maine law states you are not liable on the check unless you signed it or you authorized the signature. If an unauthorized person forges your signature on your check and if the bank pays the check, in most cases you can make the bank reimburse you for the amount of the forged check. But you must be alert. If the bank missed the forgery, someone has to spot it, and this means you. Review your statements. If you spot a forgery, contact the bank immediately. Maine law sets a one-year time limit, but don’t let the grass grow under your feet. If you are late, the bank is usually under no obligation to reimburse you.

In some cases a bank may refuse to be responsible because customer negligence caused the forgery. If your daughter has done this before and if you did not keep your checks in a safe place, maybe you were negligent. But even if you were, it may not be the end of the story. If you could show that the bank was also negligent – say it was cashed by a teller who has known you personally for years – the bank may be held partly responsible and be required to reimburse you in part.

It seems you tried and failed to persuade the bank to cover your loss. It may be time to ask a qualified lawyer if your case is as good as you believe. If it is, a strongly worded letter from the attorney may work. If it does not, consider small claims court. This may well bring the bank around and it may be possible to come to an agreement. If it does not, be prepared to press forward. This area of law is complicated. The assistance of an attorney will be critical.

Before pushing on, though, do a cost-benefit analysis. How much will you invest in legal fees and how much could you get? One last thing to keep in mind: If the bank reimburses you, it will expect your daughter to cover its losses. This could involve a lawsuit against your daughter or even criminal charges. Be careful what you wish for.

This column is a service of the Lawyer Referral and Information Service of the Maine State Bar Association. Its contents are a general response to the question and do not constitute legal advice. Questions are welcome. Go online to AAL@mainebar.org, and note you are a BDN reader. Written questions mailed to “Ask a Lawyer,” Bangor Daily News, P.O. Box 1329, Bangor, Maine, 04402-1329 will be forwarded to the LRIS.