UCC Rules Govern Loss Allocation In International Check Scam

LexisNexis (February 4, 2020, 11:23 AM EST) -- Law firms have become a favorite target of international check fraudsters. These scams feature bogus checks deposited by a new “client” of the law firm. When the checks bounce, the bank exercises charge-back against the law firm’s deposit account. In response to the charge-back, the unhappy law firm sues the bank. The bank prevails in most of these cases, based on the loss-allocation rules of the UCC and provisions in the deposit agreement. A good example is a leading case from Illinois, Dixon, Laukitis and Downing, P.C, v. Busey Bank, 993 N.E.2d 580, 81 UCC Rep. 2d 259 (Ill. Ct. App. 2013.)....