Exam 23: Checks and Banking in the Digital Age

Steve steals one of Tricia's checks and forges her signature.Tricia's bank,Unity Bank,pays the check.Tricia can recover from

Hoppy steals two checks from Eagle Retail Stores,Inc.: a blank check and a check payable to the order of General Supplies Company (GSC),drawn on Eagle's account with First National Bank.Hoppy forges Eagle's signature on the blank check and makes it payable to himself.Hoppy forges GSC's indorsement on the back of the check payable to GSC,and adds "Pay to the order of Hoppy." At Friendly Credit,Inc.,Hoppy indorses the back of both checks with his own name and gives them to Friendly for cash.Friendly does not know about the theft or the forged signatures and presents the checks to First National,which pays them.Eagle,which was not negligent,discovers the forgeries and asks First National to recredit its account.Who suffers the loss on each check

Rikki signs a check "pay to the order of Scholar University" drawn on Rikki's account in State Bank to pay her tuition.Rikki is

Financial institutions that exchange digital images of checks do not have to exchange the original paper checks.

A bank that pays a customer's check with a forged drawer's signature can generally pass the loss onto the customer.

When a check "bounces," its holder can resubmit the check later,hoping that sufficient funds will be available.

UCC Articles 3 and 4 govern checks.