Exam 30: Checks and Funds Transfers

The EFTA is concerned with the:​

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.

A check is a particular kind of draft.

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

Checks that involve amounts of more than $5,000 generally trigger the bank reporting requirements under the USA Patriot Act.

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

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?

Funds transfers made by businesses are governed by __________ regulations.

A notice of dishonor may be oral, written or electronic.

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

Postdating a check changes the check from a demand draft to a time draft.

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

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

The Railway Express Agency delivered a shipment of goods to Lorraine.Payment for the goods was made with a certified check, payable to the order of the Railway Express Agency.The check was drawn by Lorraine on the First National Bank of Detroit.Later, the bank refused to pay the check when it was presented by Railway Express, the holder, because the bank had become insolvent and stopped doing business.The Railway Express Agency sued Lorraine.Lorraine claimed that she was not liable on the check because it was certified.Is she correct?

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

A bank will not be liable for payment of a check on which the drawer's signature has been forged if:

The standard form of a check is automatically payable on demand.

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

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?

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