Exam 15: Banking in the Digital Age

An agency relationship arises between the customer and the bank when the customer writes a check on his or her account.

A certified check is a check that has been accepted in writing by the bank on which it is drawn.

Dhani signs a check "pay to the order of Eton" drawn on Dhani's account in Fidelity Guaranty Bank and dates the check "May 1." Eton presents the check to the bank for payment the following December 15. This is

O'Shea issues a check drawn on Prime Bank to Quality Equipment Supply to pay for a backhoe. Later, O'Shea discovers a defect in the backhoe and orders the bank to stop payment on the check. O'Shea does not renew the order, and the bank clears the check eight months later. The bank​

The general rule is that a bank that pays a customer's check bearing a forged indorsement is obligated to recredit the customer's account.

On an automated teller machine (ATM) belonging to USA Bank, Sven placed a card-skimming device to pull information from the magnetic strips of users' debit cards. The device then transmitted the stolen data to thieves who used it to gain access to, and empty, the bank accounts of the users, including Megan. Megan learned of the theft the next day and promptly notified USA. Is Megan entitled to a recredit of her account for most of the loss due to the theft? Explain.

When a customer deposits cash into a checking account, he or she becomes a debtor for the amount deposited.

A substitute check is a paper reproduction of the front and back of an original check that contains all the same information required on checks for automated processing.

A bank's duty to honor a check drawn on a customer's account is subject to the stipulation that the account has sufficient funds to pay the check.

Clyde issues a check payable to Discount Mart. Ethel, Discount's cashier, forges the store's indorsement and deposits the check in her account. Clyde's bank, Farmers State Bank, pays the check. Clyde's bank can recover the amount of the check from

The death of a customer immediately revokes a bank's authority to pay an item.

Refer to Fact Pattern 15-1. When Britney receives her Campus Bank statement, she demands that the bank investigate the matter and recredit heraccount. The bank

A customer who has been negligent may share liability with the bank, when the bank is also negligent.

A written stop payment order is only valid for thirty days.

Gary writes a check drawn on Hilltop Bank for $400 "payable to Ivan" on May 1. Gary dies on May 3. Ivan presents the check to the bank on May 5. Unaware of Gary's death, the bank​

Dalton presents an uncertified check for payment more than six months after its date. The check was drawn by Emma on her account in First City Bank. First bank may do all of the following except

Marta has a checking account with Neighbors Bank. Marta signs a check "payable to Olive" drawn on Marta's account. Neighbors Bank is

On Friday morning, Geoff deposits into his account at Heartland Bank a $500 check from Imelda, who also has an account at Heartland. On that same day, this check is considered

On Monday, Ellery deposits in her account at Fiscal Bank a local check for $500. Within one business day from the date of deposit, Ellery can withdraw

Riley pays State Bank $500 plus a service fee to draw a check on itself payable to Torque Plumbing. The party responsible for paying the check is​