Who Is Liable for Forged Checks?

So you're balancing your checking account and see there's a check there you can't remember writing. You find out you didn't -- someone forged your name to a check and made off with some of your money. If this happens, don’t panic; you aren't legally bound to pay up. After you report the forgery, the bank that accepted the check has to cover your loss. Rest assured the bank will do whatever it can to bring the forger to justice.


Once you discover the forgery, it’s up to you to file a suit for repayment. If the bank agrees a crime has occurred, it will refund your account. Most states have a statute of limitations on forged checks. You usually have between one and two years beginning from the date the check was cashed to report the theft. You must be able to prove you didn’t sign the check, which typically just involves comparing your signature to the forgery. You usually don’t need a lawyer because most banks have policies in place to deal with forged checks. Those policies should be explained in the agreement you signed when you opened the account.

Bank to Bank

The bank that accepted the check ends up paying the most. This bank, the depository bank in official terms, must reimburse your bank for any forged checks. For example, if one of your checks was cashed at a national bank and turned over to your local bank for payment, the national bank is liable for the money. In most cases, your bank will credit your account first, then turn to the depository bank for reimbursement.

Shared Liability

There is one scenario where a forged check could cost you personally. Let's say you run a small business and hired a bookkeeper with no credentials to handle your records. Unfortunately for you, the bookkeeper forges your name on the accounts and cashes some checks. While the bank must refund some of this money, you will be on the hook for a portion of it since it's your fault that you hired that person. The Uniform Commercial Code, which governs check cashing in America, set this up to give banks a little protection against negligent customers.


Each state has its own laws regarding check forgery. Additionally, it’s up to the prosecutor to charge the thief with a misdemeanor or felony. According to Law Firms.com, most of these crimes are felonies due to the amount of money involved. They can also clearly see the thief intended to commit fraud. Banks typically bring charges against the forger. In addition to prison time, which can range anywhere from three to 30 years, and substantial fines, the convicted check forger must pay restitution to the bank.

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