Assuming the bank is not negligent, in the case of multiple forgeries by the same wrongdoer, what is the effect of a customer's failure to notify the bank of the first forgery in regard to subsequent forgeries?

A) There is no effect because each forgery stands on its own.
B) The customer is barred from recovering on the subsequent forgeries.
C) The customer may recover on a subsequent forgery if it is reported to the bank within 5 days after the statement showing the subsequent forgery is received by the customer.
D) The customer may recover on a subsequent forgery if it is reported to the bank within 10 days after the statement showing the subsequent forgery is received by the customer.
E) The customer may recover on a subsequent forgery if it is reported to the bank within 15 days after the statement showing the subsequent forgery is received by the customer.

Question

Nancy Sachdev · Accepted Answer

Final Answer : B, Explanation :  The customer is barred from recovering on the subsequent forgeries because the failure to notify the bank of the first forgery generally precludes the customer from claiming losses from any subsequent forgeries by the same wrongdoer, assuming the bank was not negligent. This is based on the principle that the customer's notification could have prevented further forgeries by the same individual.

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