Do you record the checks you write and the checks written by your spouse on your joint checking account? How do you keep track of your withdrawals at automatic teller machines and payments made with your debit card? Do you balance your checkbook against your monthly bank statements? Or do you keep only a general idea of your checking account balance, to avoid being overdrawn?

The law regarding banks and bank customers puts a minimum obligation on the customer to review the monthly bank statement, or else the customer will be responsible for forged checks written on the customer's account. Further, laws governing electronic fund transfers require the customer to detect unauthorized withdrawals from automatic teller machines and unauthorized transfers made with debit cards. These laws regarding the responsibilities of banks and their customers, in the event of unauthorized account activity, are discussed in the following:

Forged checks: Who pays?

In general, a bank is responsible for amounts it pays on its customer's checks if the customer's signature on the check is forged. When the customer opens a bank checking account, the customer signs a signature card. At that time, the bank agrees to compare checks presented for payment against the signature card to detect forgeries. For this reason, the bank is responsible for the amounts of forged checks if the bank fails to detect forgeries on checks it pays.

However, the customer has some obligation before he is free of responsibility for forged checks on his account. The customer must review the checks returned in his monthly bank statement to initially discover the forgery. If within a reasonable time after receiving the check in the bank statement the customer fails to discover that the bank has paid on a forgery, the customer is not entitled to have his account recredited for the amount of the check.

If a customer is not in the habit of reconciling his bank statement, he may not detect forgeries in a timely fashion. Unless the checks returned in the bank statement are reviewed monthly, forgeries of the account balance will not be detected until the account balance goes below zero and the bank begins bouncing checks on the account. In this case the customer is not entitled to demand that the bank recredit the account for the amount of the forged checks.

Unauthorized automatic teller machine withdrawals or unauthorized use of debit cards: Who pays?

The law governing electronic fund transfers allows the bank customer 2 business days after receiving notice of the loss or theft to notify the bank of unauthorized machine withdrawals. If the customer provides this timely notice of unauthorized withdrawals or transfers, the customer's liability will not exceed $50. However, if the customer fails to notify the bank within 2 business days of the notice of the theft or loss, the customer can be liable for up to $500 for withdrawals that occurred because of the customer's delay. Further, the customer may be liable for up to $500 if the customer fails to notify the bank of a lost automatic teller machine access card within two days of the loss. If a loss is not reported by the customer within sixty days of the transmitting of a statement that shows the unauthorized transfer, the customer's liability can be unlimited.

Here are a few steps you can follow to avoid checking account problems:

• record all checks written, by number and also date.
  
  
• examine each new check order for correct sequential numbering and use checks in sequential order only.
  
  
• if a check is missing from the sequential order, report it to your bank immediately by phone, then follow up with a written notice.
  
  
• notify the bank immediately, by phone, then in writing, of a lost of stolen checkbook or debit card.
  
  
• keep your automatic teller machine personal identification number secret. If you write the number down, keep it separate from the card.
  
  
• reconcile the monthly bank statement with your record of checks immediately upon receipt of the bank statement.