The fictitious payee rule is based on the idea that employers should bear the risk of their own unscrupulous employees.

Question

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The fictitious payee rule places the risk of fraudulent checks on the employer rather than the bank. This is based on the principle that employers are in the position to prevent or detect fraud by their own employees, and therefore should bear the risk if such fraud occurs.

The Fictitious Payee Rule Is Based on the Idea That