B-98623, AUG 15, 1958

B-98623: Aug 15, 1958

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RELATIVE TO SETTLEMENT OF CERTAIN CLAIMS OF PAYEES OF GOVERNMENT CHECKS WHICH HAVE BEEN NEGOTIATED UPON FORGED INDORSEMENTS. THE PROCEDURE WAS DESIGNED TO EXPEDITE PAYMENT OF SUCH CLAIMS TO THE RIGHTFUL PAYEES. CERTAIN SAFEGUARDS WERE PROVIDED INCLUDING. AS FOLLOWS: "CONSIDERABLE HARDSHIP IS BEING IMPOSED IN MANY CASES BY THE SIX MONTH LIMITATION WHERE LITTLE OR NO RISK WOULD AFFORD A MORE PROMPT PAYMENT. IN OUR OPINION THE FIRING OF A RIGID SCHEDULE FOR ALL CASES IS A SERIOUS IMPEDIMENT TO THE OBJECTIVE. OTHERWISE THE COVERAGE IS NOT BROAD ENOUGH. SINCE THE UNITED STATES IS ADEQUATELY PROTECTED AGAINST LOSS. THERE IS MERIT IN THE PROPOSALS WHICH WOULD EFFECT AN EARLIER PAYMENT OF CLAIMS OF PAYEES OF GOVERNMENT CHECKS REPRESENTING SALARY.

B-98623, AUG 15, 1958

PRECIS-UNAVAILABLE

MR. SECRETARY:

LETTER OF MAY 29, 1958, FROM THE FISCAL ASSISTANT SECRETARY OF THE TREASURY, REQUESTS MODIFICATION OF THE PROCEDURE SET FORTH IN OUR LETTER OF JUNE 11, 1951, B-98623, TO YOU, RELATIVE TO SETTLEMENT OF CERTAIN CLAIMS OF PAYEES OF GOVERNMENT CHECKS WHICH HAVE BEEN NEGOTIATED UPON FORGED INDORSEMENTS.

THE PROCEDURE WAS DESIGNED TO EXPEDITE PAYMENT OF SUCH CLAIMS TO THE RIGHTFUL PAYEES, IN SITUATIONS WHERE THE AMOUNT OF THE CHECK HAS BEEN RECLAIMED, WITHOUT OMITTING THE REPORT OF THE SECRET SERVICES INVESTIGATION. IN ORDER TO MINIMIZE THE RISK OF LOSS TO THE UNITED STATES, CERTAIN SAFEGUARDS WERE PROVIDED INCLUDING, AMONG OTHERS, "2. THAT SUCH SETTLEMENTS BE MADE ONLY AFTER A SIX-MONTHS' PERIOD HAS ELAPSED FROM THE DATE OF MAKING DEMAND ON THE PRESENTING BANK, SO AS TO ENABLE ALL PARTIES HAVING LIABILITY ON THE CHECK A REASONABLE OPPORTUNITY TO PROTEST," AND "3. THAT SUCH SETTLEMENTS BE MADE ONLY WHERE THE AMOUNT INVOLVED DOES NOT EXCEED $200."

THE FISCAL ASSISTANT SECRETARY STATED WITH REFERENCE TO APPLICATION OF THESE TWO CONDITIONS PRECEDENT TO PAYMENT OF SUCH CLAIMS, AS FOLLOWS:

"CONSIDERABLE HARDSHIP IS BEING IMPOSED IN MANY CASES BY THE SIX MONTH LIMITATION WHERE LITTLE OR NO RISK WOULD AFFORD A MORE PROMPT PAYMENT. CASES INVOLVING REPETITIVE PAYMENTS SUCH AS SOCIAL SECURITY, CIVIL SERVICE RETIREMENT, VETERANS' BENEFITS AND SALARIES, WE COULD MATERIALLY IMPROVE OUR SERVICE TO INDIVIDUALS DEPENDENT UPON THESE FUNDS BY REMOVING THE TIME LIMITATION AND RELYING UPON THE YEARS OF EXPERIENCE OF SUPERVISORY PERSONNEL WHOSE APPROVAL OF THE PAYMENTS WOULD BE REQUIRED, AND THE FACT THAT THE NATURE OF THE PAYMENTS AFFORDS THE GOVERNMENT AN ADMINISTRATIVE REMEDY SHOULD ANY OVERPAYMENTS OCCUR. WE DO NOT THINK THEREFORE THAT WE WOULD BE TAKING UNNECESSARY RISKS. THE TIME FACTOR WOULD BE GIVEN CONSIDERATION IN THE HANDLING OF EACH CASE, AND THE TIME LAPSE WOULD VARY CASES, BUT IN OUR OPINION THE FIRING OF A RIGID SCHEDULE FOR ALL CASES IS A SERIOUS IMPEDIMENT TO THE OBJECTIVE.

"THE LIMITATION OF $200.00 APPEARS TO BE RESPONSIBLE IN RESPECT TO SOCIAL SECURITY AND VETERANS' BENEFITS BUT WE RECOMMEND THAT WHERE PAYMENTS REPRESENT SALARY, CIVIL SERVICE RETIREMENT OR MILITARY RETIREMENT PAY THAT THE AMOUNT BE RAISED TO $500.00; OTHERWISE THE COVERAGE IS NOT BROAD ENOUGH.

IN VIEW OF THE RECOMMENDATIONS OF THE FISCAL ASSISTANT SECRETARY IN LIGHT OF THE EXPERIENCE GAINED SINCE ADOPTION OF THE PROCEDURE UNDER CONSIDERATION, AND SINCE THE UNITED STATES IS ADEQUATELY PROTECTED AGAINST LOSS, THERE IS MERIT IN THE PROPOSALS WHICH WOULD EFFECT AN EARLIER PAYMENT OF CLAIMS OF PAYEES OF GOVERNMENT CHECKS REPRESENTING SALARY, AND CIVIL OR MILITARY RETIREMENT PAY, WHICH HAVE BEEN NEGOTIATED BY MEANS OF FORGERY.

THEREFORE, THE PROPOSALS TO MODIFY THE QUOTED CONDITIONS IN THE MANNER OUTLINED IN THE LETTER OF MAY 29, ARE APPROVED WITH THE SUGGESTION THAT THE $500 CEILING BE EXTENDED TO INCLUDE PAYMENTS REPRESENTING EMPLOYEES' DISABILITY COMPENSATION BENEFITS AND FOREIGN SERVICE RETIREMENT ANNUITIES.