Exam 31: Checks and Funds Transfers

When a drawee bank pays on a check that lacks an essential endorsement:

The EFTA is concerned with the:

A "tender" occurs when the holder of a check or other consumer transaction authorization demands payment.

A check is drawn on the assumption that the bank has sufficient funds in the drawer's account for payment.

A forged indorsement must be reported within:

A check may be certified by a bank on 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.

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

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:

The drawee of a check is always a bank.

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

The delivery of a check is regarded as an assignment of money on deposit, and the drawee bank is required to pay the holder the amount of the check.

A bank is required to pay a check presented more than six months after its date.

Customers are precluded from asserting unauthorized signatures or alterations if they do not report them within __________ from the time the bank statement is received.

To be effective, checks must be executed on forms that are printed expressly for that purpose and issued by a bank or other financial institution.

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

Sondra realized on Tuesday that she had dropped her bank EFT card after using it at an automatic teller machine. She telephoned the bank on the following Monday to notify it of the loss. By that time, someone had used the card to withdraw $800 from Sondra's account. The bank said it would cover $300 of that amount. Sondra sued for the full amount, claiming that she had exercised reasonable care in reporting the loss, especially because the card was lost on bank premises. Will she be able to recover the full $800?

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

If a check has not been certified, a holder has no claim against the bank for the dishonor of a check.

A depositor's unauthorized signature must be reported to the bank within three years of the time that the bank statement is received.