Exam 18: Bank-Depositor Relationships and Cyber-Banking

While cleaning out her desk, Chen found a certified check she had received eight months earlier and had forgotten to cash. When she brought the check to the bank on which it was drawn, the bank refused to cash it. Discuss the legal rights of the parties in this case.

Under the Check 21 Act, bank customers have an absolute right to see their original canceled checks.

Ivan receives his June 2015 Friendly Bank statement and promptly calls the bank to report a series of forged checks shown on the statement dating back to March 2015. Friendly Bank must credit Ivan's account for the forged checks.

A stale check is a check that is presented for payment more than three months after its date.

Kelley offers Hamilton a $20,000 check which she knows has been forged. Her offer is best known as:

Expedited credit can be claimed by consumers who have suffered losses related to substitution checks.

Ashton Bank knows that its customer, Juan, has died. One day after Juan's death, Ashton Bank was presented a check for clearing of $3,000. The check was written by Juan a week prior to his death to Bailey Enterprises. Discuss the legal rights of Bailey Enterprises.

If Nina, a payee, deposits a check made payable to herself in her own account in a bank that is not the payor bank, any settlement given by the depositary bank is final.

A consumer has the right to claim an expedited credit if the customer asserts in good faith that the:

Dreamwork Bank uses the substitute check procedure to rapidly obtain payment of items deposited by its customers. An employee of the bank fraudulently alters some substitute checks so that they are for greater amounts than the original paper check and embezzles the difference. Discuss the bank's warranties in this situation.

Julie has a nine month old certified check drawn on Harold Bank. Harold Bank is obligated to pay the check.

A business receiving money by electronic transfer is known as the beneficiary.

Tammy's ATM card is stolen. If she notifies the issuer of the card of the theft within two business days of theft, Tammy will be liable for ____________ of unauthorized use.

Oliver wrote a check to Greg Motors for $4,000 drawn on Uphill Bank in payment for a secondhand car. Greg Motors deposited the check in its account at Seventh Day Bank, which sends the check to Uphill Bank for collection. Oliver's car broke down before he reached home that evening, and he contacted his bank to stop payment on the check. Discuss what Uphill bank must do with the check to ensure a stop payment.

If a bank pays a check in cash to the payee, and the check is returned to the drawer with the next bank statement, the bank's settlement is said to be:

Small Bank mistakenly dishonors a $5,000 check written by its customer, Wanda, to Hyram Real Estate as a down payment for a new home. As a result of the dishonor, Wanda's closing is delayed by thirty days. She incurs $500 extra rental expenses, $1,000 in attorney's fees and home mortgage interest rates increase by one half percent before her closing. Hyram deposited the $5,000 check in its account and suffered $300 in NSF charges when credit for the deposit was withdrawn. Discuss the liability of Small Bank to Wanda and Hyram.

Josie writes a check on January 15 to Rusty Enterprises, but later realizes that the merchandise she purchased was of poor quality. She gives a stop payment order to the bank on January 20. Her bank has the check in its possession and is accepting it as she completes her stop payment order. Her bank pays the check, and Josie demands that her account be recredited. Discuss the legal aspects of this situation.

A(n) ____________ is a check that is presented for payment more than six months after its date.

Which of the following is true of the relationship between the drawee bank and its customer?

Regulation CC requires banks to make funds available to depositors according to a prescribed schedule.