Exam 28: Banking in the Digital Age

Fact Pattern 28-1B (Questions B8 and B9 apply) Dana takes her car to Efficient Auto Repair Service, which repairs the car and bills Dana for $500. She writes out a check drawn on First Choice Bank, but later, believing that Efficient Auto did not repair the car properly, issues a stop-payment order. -Refer to Fact Pattern 28-1B. First Choice

When processing a check, Superior Bank encodes information, such as the amount of the check, on the item. Superior thereby warrants to any subsequent bank or payor

Fredrik signs a check "pay to the order of Gennifer" drawn on Fredrik's account in Harborside Bank to buy Gennifer's jet ski. Fredrik asks the bank to indicate on the face of the check that it will accept it when Gennifer presents it for payment. If the bank agrees, this will be

Banks must pay interest based on the full balance of a customer's interest-bearing account on the day the bank posts the interest.

Financial institutions that exchange digital images of checks must also send the original paper checks.

Misty's debit card, issued by National United Bank, is stolen and used without her permission. She tells the bank within thirty days. She may be re?quired to pay no more than

If a customer's debit card is lost or stolen and used without his or her permission, the customer shall be required to pay no more than $50 in any event.

Amelia writes a check to Barry on her account at Community Savings Bank. The bank dishonors the check even though Amelia has sufficient funds in her ac?count. The bank is

The bank is liable to the payee or the holder of check in a civil suit if a check is dishonored for insufficient funds.

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 the most of the loss due to the theft? Explain.

Martha has a checking account with Homeplace Bank. Martha signs a check "payable to Phillipa" drawn on Martha's account. Homeplace Bank is

A stop-payment order is an order by a customer to his or her bank not to pay a certain check.

Dru signs a check "pay to the order of Eppie" drawn on Dru's account in First State Bank. Greta forges Eppie's indorsement. First State pays the check. Most likely

A forged signature on a check has no legal effect as the signature of a drawer.

In every situation involving a forged drawer's signature or an alteration, a bank must observe reasonable commercial standards of care in paying on a customer's check.

A customer who fails to report a forged signature within thirty days from the date that the bank statement showing the item was made available for inspection loses the legal right to have the bank recredit his or her account.

Check 21 requires banks to change their current check-collection practices.

Valley Bank retains the cancelled checks of its customers. Valley must be able to provide customers with legible copies of checks paid for

When receiving a stale check for payment, a bank has no option but to pay the check.

If a bank wrongfully dishonors a cashier's check, a holder can recover only the amount of the check.