Exam 30: Checks and Funds Transfers

Miriam issued two checks.The first check was made payable to her neighbor for a used car that the neighbor sold to Miriam.The second check was a rent payment to Miriam's landlord for the current month's rent.?The car was purchased on the basis of the neighbor's written assurance that the car had only 38,000 miles of use.After Miriam took possession of the car,Miriam's mechanic checked the vehicle and substantiated that the odometer had been turned back.The car had actually been used for 79,000 miles.Miriam stopped payment on the check and offered to return the car.Meanwhile,the neighbor had purchased a computer and had negotiated Miriam's check to the vendor in payment.Discouraged by the problems with the car,Miriam decided to take a vacation.She issued a written stop payment to her bank on the rent check because she intended to use this money for the vacation.Although the drawee bank had ample time to act,it made an error and paid the rent check instead of stopping payment.Two lawsuits resulted.In the first,the vendor of the computer sued Miriam on the check.In the second,Miriam sued her bank for paying over her timely stop payment order.Decide both cases.

A check may be certified by a bank upon the request of the drawer or the holder.

A thief stole Art's checkbook and forged Art's name as drawer of a check.The drawee paid the check in good faith and sent it to Art with the monthly statement on January 3,2013.The thief forged other checks during February and March of 2013,which the drawee in good faith paid.All paid checks were sent to Art with monthly statements.On May 25,2014,Art discovered all of the forgeries and notified the drawee.For which check(s)is Art entitled to be reimbursed?

A debit transaction occurs when a person making a payment requests such payment be made to the beneficiary's bank.

Harvey issued a check to AgribizCo and,after mailing the check,suffered a heart attack and died.In the regular course of business,the bank paid the check when presented by AgribizCo for payment,despite the fact that the bank had received notice fourteen (14)days earlier of Harvey's death.In terms of the bank's payment of the check

A bank always is liable to the depositor on a counterfeit check that the bank has paid.

A bank must be given a reasonable amount of time to put a stop payment order into effect.

Most states provide that if a dishonored check is not made good within a stated period of time,it will be presumed that the check was originally issued with the intent to defraud.

Morris issued a check to Al in payment of a debt.There were sufficient funds in Morris' account to cover the check when it was presented for payment.However,due to an error,the bank dishonored the check.Which of the following parties is/are potentially liable to the holder?

All of the following are correct concerning stop payment orders,except: ______.

A buyer may stop payment on a certified check issued to a seller if the goods are defective when received.

If a consumer reports the loss before the card is used,the consumer: ______.

The fact that a stop payment on a check has been issued renders the check nonnegotiable.

When a bank certifies a check,the amount involved in the certification will be debited in the depositor's account until payment of the certified check.

The drawer of a check is always a bank.

A consumer who notifies the issuer of an EFT card within two (2)days after learning of a loss or theft of the card is limited to a maximum liability of:

A consumer who notifies the issuer of an EFT card within two (2)days after learning of a loss or theft of the card can be held to a maximum liability of $500 for unauthorized use of the card; failure to notify within this time will increase the consumer's liability for losses to a maximum of $5,000.

The EFTA is concerned with the:

An oral stop payment order is binding on the bank for __________ days unless confirmed in writing within that time.

A written stop payment order or confirmation is effective for: