Can’t Find Your Checkbook? It May Be a Problem

What are your legal obligations regarding a check?

To answer this question I want to bring you a true story from the Israeli Courts.

Mr. Doe was a very serious and organized person, but also very "naive". Mr. Doe used to trust people, especially his friends.

Sarah was a very good friend of Mr. Doe and in fact Mr. Doe had a liking for her. Both were in their late 50’s, divorced and with a lot in common, but not everything. Sarah had a gambling problem that Mr. Doe was not aware of.

Mr. Doe used his bank account mostly for cash withdrawal and credit card payments. He had a checkbook he rarely used. Mr. Doe kept his checkbook on his desk at home. Eventually he forgot about the checkbook.

Sarah had not come to Mr. Doe`s house for more than two months. No explanations were given and no questions were asked. Mr. Doe knew something was wrong but could not force Sarah to talk about it. They spoke over the phone a few times but no signs of problems were given by Sarah.

One day, out of the blue, Mr. Doe received a phone call from a company dealing with "financial services". Mr. Doe did not understand the real meaning of that conversation but now he was worried.

From the phone call he learned that a check of his for 20,000 shekels had bounced. Mr. Doe had no record of ever giving anyone a check for that amount, and in fact he did not even have that kind of money in his account. The company holding his check wanted to be paid - and soon.

The next day, Mr. Doe went to his bank and there he learned that indeed one of his checks had bounced. He asked for a copy and learned that although the check was his, the signature on the check was not his - it was similar, but not his.

Mr. Doe was now curious about the incident. He went home and after searching unsuccessfully for his checkbook he finally realized that it was gone, stolen from him. He could not think of any suspect.

Mr. Doe made a copy of the check and went to the police station to complain about the forgery. A file was opened and the police promised to investigate. Now Mr. Doe was not so worried and why should he be? The signature was forged.

A few months after that phone call, the company holding Mr. Doe`s check sued Mr. Doe in the "Otsaa La Foal". Mr. Doe had no other choice but to hire a lawyer to help him.

From his lawyer he learned that there was no automatic defense and a special request for defense had to be asked from the Judge. The request was granted and the defense was presented in court.

It took Mr. Doe more than a year to clean up the mess and it wasn`t a "free ride" but a very expensive lawsuit. As a defendant, Mr. Doe had to prove that the signature was not his and was forged. He paid not only his lawyer`s fees but also for the expert handwriting analysis regarding his signature. It cost him more than 10,000 shekels in expenses and it was very time consuming.

When the company learned that the signature was not his, they tried to prove that Mr. Doe was negligent by having his checkbooks unattended when he knew of Sarah`s gambling addiction. How did these people know that? When Mr. Doe went to the police they asked him who had been in the house, if his friends knew where the checks were kept, etc. Mr. Doe had replied that he had no suspects but he told them about Sarah who had disappeared in the meantime.

The police brought Sarah in and after a few hours she confessed all. She was a gambler and had lost a large amount of money. She had stolen the checkbook, and because she knew Mr. Doe`s signature well, she could easily forge it. For Mr. Doe it was a shock, but it was too late now. He was careless with his checks so now he was paying the price.

The judge dismissed the case and did not accept the plaintiff`s theory that Mr. Doe knew about Sarah`s problems and let her have a "free hand in the house" as they claimed. The judge did agree that the checkbook should be kept in a better place but it did not mean Mr. Doe should be held responsible in this case.

A word of wisdom:

Be wise! A checkbook is an important document. It can be translated into real money if someone can forge your signature and there are many good "professionals" out there - don`t make their life easier.

You do not have any obligation to keep your checkbook in a safe or in a secure drawer, but as you have to be reasonable and sensible with medication you keep at home (especially if you have young children), you should be responsible and careful with your checkbook and credit cards.

It could save you a lot of money and anguish.

Sincerely,
 

Tzvi Szajnbrum, Attorney at Law