When the amount of a check has been wrongfully altered to a higher amount than it was originally for,the drawer is generally liable only for the original amount of the check,assuming the drawer gives appropriate notice of the alteration to the bank.

Question

Quizplus · Accepted Answer

This is known as the "fictitious payee rule." As long as the drawer reports the alteration to the bank in a timely manner, they will only be liable for the original amount of the check, not the altered amount. However, if the drawer was negligent in protecting the check or failed to report the alteration in a timely manner, they may be held liable for the full amount of the altered check.

When the Amount of a Check Has Been Wrongfully Altered