Exam 30: Checks and Funds Transfers

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

An "encryption" warranty is a warranty made by any party who encodes electronic information on an instrument.

An overdraft is treated as a loan from the bank to the customer, and the customer must repay that amount to the bank.

A bank is not required to pay a check presented more than three months after its date.

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

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

If a bank pays a check whose face has been altered to increase the amount above that which the drawer intended to pay, the bank:

The Electronic Fund Transfers Act (EFTA) covers all transactions, including those that originated by commercial paper.

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

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?

Funds transfers made by businesses are governed by __________ regulations.

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:

In a complex funds transfer, an intermediary bank may receive and transmit the payment order.

A written stop payment order is binding on the bank for 90 days.

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

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

Consumers have the responsibility to examine periodic statements provided by their financial institutions. If a loss would not have occurred but for the failure of a consumer to report within __________ of the transmittal of the statement any unauthorized transfer, the loss is borne by the consumer.

A forged indorsement must be reported within: