Forged Payee Indorsement

[Kerri Martin]

In the instance of a check that was stolen and then the payee’s signature was forged, is the paying bank responsible for making their customer (the issuer of the check) whole so they can issue the payee another check? It is outside of the return window so the paying bank is issuing a breach of warranty to the depositary bank. In the instance that the depositary bank would refuse reimbursement is it the paying bank or the paying bank’s customer that would have to sue the depositary bank?

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