DEFINITION of 'Altered Check'
BREAKING DOWN 'Altered Check'
Altered checks are specifically addressed in the Uniform Commercial Code (UCC) Section 3-407. The term "alteration" is defined as either:
(1) an unauthorized change in an instrument that purports to modify in any respect the obligation of a party; or
(2) the unauthorized addition of words or numbers or another change to an incomplete instrument relating to the obligation of a party.
Under the UCC, the liability for an altered check can reside with the various parties involved - including the customer drawing the check, the bank on which the check is drawn and the bank that presents the check - depending on the evident negligence. Ordinarily, a customer needs to examine his or her bank statement and report the loss within 30 days. Regardless of any negligence by the drawee bank, a customer will be barred from recovery if he or she does not report the loss within one year.