Adley Abdulwahab (Wahab) opened an account on behalf of W Financial Group, LLC, with Wells Fargo Bank. Wahab was one of three authorized signers on the account. Five months later, Wahab withdrew $1,701,250 from W Financial's account to buy a cashier's check payable to Lubna Lateef. Wahab visited a different Wells Fargo branch and deposited the check into the account of CA Houston Investment Center, LLC. Wahab was the only authorized signer on this account. Lateef never received or indorsed the check. W Financial filed a suit to recover the amount. Applying the rules for payment on a forged indorsement, who is liable?

Question

Business

Cindy

27 June, 04:56

Adley Abdulwahab (Wahab) opened an account on behalf of W Financial Group, LLC, with Wells Fargo Bank. Wahab was one of three authorized signers on the account. Five months later, Wahab withdrew $1,701,250 from W Financial's account to buy a cashier's check payable to Lubna Lateef. Wahab visited a different Wells Fargo branch and deposited the check into the account of CA Houston Investment Center, LLC. Wahab was the only authorized signer on this account. Lateef never received or indorsed the check. W Financial filed a suit to recover the amount. Applying the rules for payment on a forged indorsement, who is liable?

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Answers (1)

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Kael Bush · Answer 1

The bank must re-credit the customers account when a check is paid with forged signature.

Explanation:

The answer to the given question is that:

The bank must re-credit the customers account when a check is paid with forged signature. It is a general rule as a forged signature does not has a legal effect on a check. This is the only reason the bank requires signature cards from each customer to verify the signature of a customer on the check. Bank verifies signature when the threshold exceeds a certain limit.