BARCLAYS BANK was legally bound to pay out on a stolen forged cheque backed by an old-style Connect card, the Court of Appeal ruled yesterday - in a test case decision that could cost the bank 'tens of millions of pounds'.
In a 2-1 majority ruling, the Master of the Rolls, Sir Thomas Bingham, and Lord Justice Evans held that the bank was liable to honour a cheque with a forged signature when apparently the same signature appeared on the card.
They rejected its claim that payment was not due when the cheque card was presented by a fraudster. They allowed an appeal brought by First Sport Ltd, of Washington, Tyne and Wear, against a ruling in Peterborough County Court, Cambridgeshire, last July, that the bank was legally entitled not to honour a cheque the company received from a customer who used a forged cheque and stolen bank card to pay for pounds 49.99 worth of goods. The bank is to appeal to the House of Lords.Reuse content