Forged signatures

jaylay_2

Hi,
One of my employees has been cashing cash cheques at the bank for some time. It was discovered last week and the employee had been dismissed and the matter passed to the police. Does anyone know if the bank is responsible for paying the money back as they were paying out cash for cheques with forged signatures on? Anyone have any idea?

swampduck

You'll have to check with the bank - but an alternative option maybe to claim on your business insurance.

Swampy

alanq

swampduck wrote: »

You'll have to check with the bank

I think that the bank may be biased! I suggest an impartial source of information.

e.g. http://www.financial-ombudsman.org.uk/publications/ombudsman-news/47/47_forged_signatures.htm

How did the the employee get hold of the chequebook? Were they allowed to write cheques but did so for purposes that were not approved? How long was "some time"? The bank is likely to want to prove that the business was negligent in allowing this to happen.

antrobus

jaylay wrote: »

Hi,
One of my employees has been cashing cash cheques at the bank for some time. It was discovered last week and the employee had been dismissed and the matter passed to the police. Does anyone know if the bank is responsible for paying the money back as they were paying out cash for cheques with forged signatures on? Anyone have any idea?

As far as I can recall from banking law, a forged cheque is a nullity, and any bank that pays a forged cheque is oliged to reimburse the customer whose account has been debited.

In this case though, I imagine the bank may well have regard to the fact that the employee had been "cashing cash cheques at the bank for some time" and believe that you were negligent in not spotting this sooner and hold you liable for the loss they would otherwise have suffered.

You can, of course, seek to recover your loss from the employee concerned.

jaylay_2

Thanks for the replies. They look to agree with what I expected. The employee was responsible for the banking although would not a signatory on the cheques. She forged the 2 signatories and cashed cheques. We are still investigating how long she has been doing this. And what the value of the loss is. Thanks again or the replies.

meer53

Malcnascar wrote: »

As has been said, the Bank has a duty to only pay funds away on a genuine signature. The financial ombudsman service has an article covering this

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/47/47_forged_signatures.htm

have a look and talk to your bank about them putting you back in the position you would have been in had they not paid funds on a forged instrument.

It all depends on how good the forged signatures are ! They could be identical to the genuine ones. Banks don't check signatures on cheques unless they are high value or they are suspicious. As Antrobus has already said, if she regularly cashed cheques, and it wasn't reported, why would they be suspicious ?