Fraudulent Cheque: The Collecting Bank Is Not Liable Without an Apparent Anomaly (Cass. com., 10 June 2026, No. 24-19.348)

French Supreme Court (Cour de cassation), Commercial, Financial and Economic Chamber, 10 June 2026, No. 24-19.348 (judgment No. 316 F-D, quashing)

What happened in this case?

Between 29 May 2007 and 26 September 2008, an individual handed several cheques to a third party in order to make property investments. These investments proved to be purely fictitious: the payee of the cheques was in fact a fraudster, subsequently convicted by a final judgment of fraud (escroquerie), counterfeiting, forgery and use of counterfeit cheques. The investor, who lives abroad, lost considerable sums in what amounts to a large-scale fraudulent scheme.

Rather than trying to recover his money from an insolvent fraudster, on 4 June 2013 the victim turned to the bank that had cashed the cheques into the fraudster’s account. His strategy rested on two distinct grounds. First, he accused the bank of a breach of its duty of vigilance: in his view, the institution should have detected the anomalies surrounding the operation of the payee’s account. Second, he sought to hold the bank liable as principal (commettant), on account of the conduct of two of its employees who had been in contact with the fraudster.

The Paris Regional Court (tribunal de grande instance de Paris) ruled on 5 January 2022. By a judgment of 26 June 2024, the Paris Court of Appeal (Pôle 5, chamber 6) had, after partially overturning that ruling, ordered the bank to compensate the victim for his financial loss. The bank lodged a main appeal on points of law raising four grounds; the victim lodged a cross-appeal. On 10 June 2026, the Commercial Chamber of the French Supreme Court quashes the judgment of the court of appeal in its entirety, on the first and fourth grounds of the main appeal, and refers the case back to the Paris Court of Appeal, differently composed.

What is the collecting banker’s duty of vigilance?

To understand what is at stake, one must first grasp the delicate balance that the law imposes on the banker. The banker is bound, in principle, not to interfere in its customer’s affairs. This is the duty of non-interference (devoir de non-immixtion).

But this principle of non-interference has an essential limit: the duty of vigilance. The bank cannot turn a blind eye to everything. Where a transaction presents an apparent anomaly, it must react, or even refuse to execute it.

The French Supreme Court here recalls the classic formula, which serves as the pivot of the whole reasoning: “A banker, who is bound not to interfere in its customer’s affairs, incurs liability only where there are apparent anomalies that are easily detectable by a reasonably diligent professional.” Everything therefore turns on two words: the anomaly must be both apparent and easily detectable. An irregularity that is concealed, sophisticated or that would require an in-depth investigation falls, in principle, outside the duty of vigilance.

Why does the Court refuse to see an “apparent anomaly”?

The court of appeal had nevertheless painted a picture that seemed, intuitively, damning. It had noted that the fraudster’s account had been credited, irregularly and over a fairly short period, with numerous cheques or transfers totalling more than €2,600,000; that the sums deposited were quickly spent; and that the account had been the subject of 18 attachments, which had led to the opening of so-called “ring-fencing” accounts (comptes de cantonnement) between 2007 and 2009. It inferred from this that the bank’s attention should have been aroused, and that it had been at fault in cashing the cheques.

Was the way the fraudster’s account operated not enough to raise the alarm?

This is where the French Supreme Court sets a strict requirement. It holds that the grounds relied on by the court of appeal were “unsuited to establishing apparent anomalies in the operation of the account”. To reach this conclusion, it relies on two findings.

First, the court of appeal itself had found that the disputed cheques showed no sign of forgery: materially, they were perfectly regular. Second, the juxtaposition of the names of two beneficiaries on a cheque does not, in itself, constitute an apparent anomaly. In the absence of any visible irregularity on the payment instruments themselves, and of a sufficiently established anomaly in the operation of the account, the court of appeal had not given a legal basis for its decision.

In other words, the Court is not saying that a succession of attachments or a flow of millions of euros could never constitute an anomaly in the operation of an account. It is saying that, in this case, the elements relied on were not sufficiently linked together to establish an apparent anomaly within the meaning of its case law, all the more so as the cheques were materially beyond reproach.

Two beneficiaries on a cheque: is that an anomaly?

One specific point needed to be decided. Several cheques had been made out to the order of the fraudster, with a second beneficiary indicated (sometimes the bank itself). The court of appeal had seen this as a signal: the bank should have asked itself about the risk of confusion fostered by the fraudster around his own name, and about the true intention of the person issuing the cheque.

The French Supreme Court sweeps this argument aside: the juxtaposition of the names of two beneficiaries on a cheque does not, in itself, constitute an apparent anomaly. In itself, a cheque may carry several entries without that revealing a fraud. For the Court, requiring the bank to question systematically the “intention of the issuer” would amount to imposing a form of investigation incompatible with its duty of non-interference.

Why is the bank not liable for the acts of its employees?

The second front of the dispute was more unusual. The victim did not merely accuse the bank of a failing in the handling of the cheques: he argued that two employees of the institution had, through their conduct, contributed to the success of the fraud. One of them, presented as an adviser, had allegedly taken part in events organised by the fraudster, in the presence of potential clients, creating the misleading appearance of a close link between the bank and the property scheme. The bank had in fact sanctioned these employees. On this basis, the court of appeal had held the bank liable as principal (commettant).

The French Supreme Court also quashes on this point, citing Article 1384, now 1242. It recalls that the principal’s liability presupposes a causal link between the wrongful act attributed to the employee and the damage. Yet the court of appeal had not found that the employees’ wrongful conduct had been carried out in front of the victim, nor that it had induced him to issue the cheques whose reimbursement he was claiming. The direct causal link was missing, and the decision again lacked a legal basis.

A questionable decision: what can be said against it?

On a technical level, the judgment is in line with settled case law: the collecting banker is not the insurer of frauds committed by its customers, and the juxtaposition of two beneficiaries on a cheque is indeed nothing abnormal. Nevertheless, several aspects of the decision deserve, in our view, to be discussed (not out of a spirit of contradiction, but because they mark out a line of defence that is very favourable to banks to the detriment of fraud victims).

First, on the conception of the operational anomaly. The Court expressly recognises the category of “apparent anomalies in the operation of the account”. But by finding insufficient such spectacular elements as eighteen attachments, the opening of ring-fencing accounts and a flow of more than €2.6 million quickly dissipated, it sets the bar at a height that raises questions. One may ask: if such a body of evidence is not enough, what ever will be? The reasoning tends to shift the analysis towards the sole material regularity of the cheques, whereas the case law on operational anomalies was precisely intended to go beyond a formal examination of the payment instrument.

Second, on the practical impact. Through its own ring-fencing accounts and its knowledge of the attachments, the bank had information that the victim, an investor based abroad, obviously did not have. The information asymmetry is total. By exonerating the bank, the decision places the entire loss on the party least equipped to detect the fraud, and leaves aside the institution best placed to spot such an atypical operation of an account. The imbalance is hard to ignore.

Third, on the causation requirement for the principal’s liability. By requiring that the employee’s conduct have been “carried out in front of the victim” and to have “induced him to issue the cheques”, the Court adopts a narrow reading of the causal link. Yet modern frauds often rest on a diffuse appearance of respectability, built collectively and exploited remotely. Requiring a scene of direct presentation between the employee and each victim amounts to neutralising the principal’s liability whenever the fraud is organised through intermediaries or reputation, which is precisely the modus operandi of the most sophisticated schemes. For a victim living abroad, the requirement of direct presence is particularly formidable.

It remains that the quashing is pronounced for lack of legal basis, and not for breach of the law. This nuance is crucial: the Court does not close the door definitively. It faults the court of appeal for having given insufficient reasons, not for having been wrong in principle. The fight can therefore continue before the court to which the case is referred, provided the facts are better established.

What can a victim concretely do after this judgment?

As the case has been referred back to the Paris Court of Appeal, differently composed, nothing is settled. For the victim (and for anyone in a comparable situation) several avenues remain open.

Better establish the operational anomaly. Since the Court criticises a failure to establish it, one must document precisely how the operation of the account revealed, to a reasonably diligent professional, a detectable irregularity: chronology of the attachments, inconsistency of the flows given the holder’s declared profile, any internal alerts, monitoring systems that the bank should have activated. The aim is to turn an impression of abnormality into a legally watertight demonstration.

Reconstruct the causal link for the principal’s liability. Under Article 1242, it will be necessary to adduce proof, if it exists, that the employees’ conduct was perceived by the victim and weighed on his decision to hand over the cheques: direct exchanges, introductions, emails, witness statements. This is exactly the link the Court found to be missing.

Conclusion

The judgment of 10 June 2026 illustrates the firmness with which the French Supreme Court protects the collecting banker’s duty of non-interference. By requiring genuinely apparent and easily detectable anomalies, and a direct causal link for the principal’s liability, it makes it harder for victims of large-scale frauds to hold the bank to account. This is regrettable: the bank is often the only actor able to spot a manifestly atypical operation of an account, and exonerating it amounts to shifting the risk onto the most vulnerable party.

But this decision is not a dismissal of the appeal: it is a quashing for lack of legal basis, which sends the case back to be retried. Everything therefore remains a matter of evidence and of establishing the elements. With a better-constructed case, a victim can still convince the lower courts. If you believe that your bank failed in its vigilance in the face of a fraud, or that its conduct contributed to your loss, a banking law attorney can analyse your chances and build the demonstration that the French Supreme Court now requires.

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