An alteration might be loosely described as any change of the writing on a check made without the authority of the drawer or of any other party to the check, such as an endorser. A material alteration may consist of raising or otherwise changing the amount of the check, changing the name of the payee (the person to whom the check is given), or making other changes on the check, such as to the date or to the name of the drawee (the person from whose bank account the check is withdrawing funds) or payor bank. In most cases, checks are altered for fraudulent purposes.
- What Changes Do Not Constitute Alterations?
- Who Has the Burden of Showing That There Is an Alteration on a Check?
- What Are My Rights If I Have Unknowingly Received an Altered Check?
- What Is the Liability of the Bank for Paying an Altered Check?
- Should I Contact a Lawyer Regarding My Altered Check Issues?
In general, alterations to the check that do not change the contract that the check is a representation of are not material. For example, due to the widely-followed rule that words control numbers on ambiguously written checks, when one changes the amount of a check in numbers without changing the amount in written out in words, there is no alteration.
The law generally places the burden of proving the existence of the material or improper alteration on the person seeking to avoid liability on the check. Many courts suggest that the burden might be the other way around where there is an alteration. In other words, where there is visible evidence of alteration, a bank or holder could not claim to not be aware of the alteration.
A person taking an altered check for value, in good faith, and without notice of the alteration may enforce their rights with regard to the check in its original state.
Generally, a bank that makes a payment to a holder in good faith may charge the indicated account of the bank’s customer according to the original terms of the altered check. In other words, if a check originally issued for $25 is raised to $2,500 and is paid in the raised amount, the bank may charge the drawer’s account, but only for the original $25 amount.
If you are being sued for altering a check, or you believe your bank has processed a check that has been clearly and wrongfully altered you should contact a financial lawyer immediately. Both have serious consequences on the criminal and civil sides of the law.