What Is the Bank's Liability When Fraud Occurs Using a Check?

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When fraud occurs a particular bank is liable for a few particular things. Find out what the bank's liability is when fraud occurs with help from a personal finance professional in this free video clip.

Part of the Video Series: Money Management
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Video Transcript

Hi, my name is Andrew Schrage, co-owner of the MoneCrashers.com personal finance website, and today we're going to discuss what is a bank's liability when fraud occurs using your checks? Generally, a bank will look to see if you exhibited what's called ordinary care with your checks. In other words, did you secure your checks properly, and did you report the fraud in a timely fashion? On the latter point, it's usually a 30 day window in which you need to report the fraud to your bank. If you've met both of these requirements, most banks will compensate you for any fraud that occurred. What I strongly suggest is on a monthly basis make sure you check your banking accounts and ensure that all the spending and check usage meets exactly what you authorized. If not, you do need to check with your bank immediately to ensure that fraud has not occurred, and to make yourself available for any compensation, if it has occurred. Once again, this is Andrew Schrage, co-owner of MoneyCrashers.com, discussing what to do in the case of check fraud, and what a bank's liability is.


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