What are the warranties and indemnifications provided for in the Act?
Under the Act, the bank that creates the substitute check, called the Reconverting Bank, and any bank that subsequently transfers, presents, or returns a substitute check for consideration provides the warranties prescribed in the Act, and an indemnity. The two warranties in the Act are: 1) that the substitute check meets all requirements for legal equivalence (that is, the substitute check accurately represents the information from the front and back of the original check and includes the required legend identifying it as a legal copy of the original check), and 2) that no bank will be asked to make payment on an item that it has already paid (no double debit). The warranties travel with the substitute check and any subsequent image of a substitute check, and apply regardless of whether a subsequent party receives the substitute check or an image of the substitute check. The indemnity is provided to all parties in the collection or return stream for a loss that occurred due to the rec
