Smith v Lloyds TSB Group plc [2001] QB 541 was a decision of the Court of Appeal relating to the liability of a bank where it makes payment upon a fraudulently altered cheque.

The altered instruments were presented to the collecting bank, paid into an account in the name of the third party and cleared.

The banks conceded that they had converted the pieces of paper, but denied liability for the face value of the instruments on the ground that by virtue of section 64(1) of the Bills of Exchange Act 1882 (45 & 46 Vict.

He held that the effect of the word "avoided" in section 64 of the Bills of Exchange Act 1882 (45 & 46 Vict.

c. 61) was that, subject to the qualifications therein, a cheque or banker's draft which had been materially altered by the fraud of a third party was no longer a cheque or draft representing a chose in action but a worthless piece of paper, and no action for damages in conversion for its face value could therefore be brought by a party, such as the claimants, who, but for the material alteration, would have had contractual rights based upon it.