Peter forged Andrew's signature on a check and cashed it draining Andrew's entire bank account. Peter skips town and cannot be located and therefore, the drawee bank will be liable for the forged check.

Question

Quizplus · Accepted Answer

The drawee bank is generally liable for a forged check if it pays out on the check because it is the bank's responsibility to verify the authenticity of the signature against the signature they have on file. If the bank fails to identify the forgery and pays out, it typically bears the loss.

Peter Forged Andrew's Signature on a Check and Cashed It