Exam 27: Checks and Banking in the Digital Age

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

Paris knowingly divulges to Media Exposure magazine information about Randy's e-money payments to City Bank without the consent of Randy or City Bank. Paris may be in violation of federal law

A bank that encodes information on an item after the item has been issued warrants to any subsequent bank that the encoded information is correct.

Hoppy steals two checks from Eagle Retail Stores, Inc.: a blank check and a check payable to the order of General Supplies Company (GSC), drawn on Eagle's account with First National Bank. Hoppy forges Eagle's signature on the blank check and makes it payable to himself. Hoppy forges GSC's indorsement on the back of the check payable to GSC, and adds "Pay to the order of Hoppy." At Friendly Credit, Inc., Hoppy indorses the back of both checks with his own name and gives them to Friendly for cash. Friendly does not know about the theft or the forged signatures and presents the checks to First National, which pays them. Eagle, which was not negligent, discovers the forgeries and asks First National to recredit its account. Who suffers the loss on each check

The maximum time that a bank can hold funds from deposited checks before making them available to the depositor will not change.

Only a customer or a person authorized to draw on an account can order a bank not to pay a check when it is presented for payment.

A drawer is liable to the holder of a check if the check is not honored.

The first bank to receive a check for payment is the intermediary bank.

Shakira issues a check drawn on Thrifty Bank to United Office Supply to pay for six computer desks. Later, Shakira discovers defects in the goods and orders Thrifty to stop payment on the check. Shakira does not renew the order, and the bank clears the check eight months later. The bank

Any failure of a bank to honor a check because it would create an overdraft is a wrongful dishonor.

Rikki signs a check "pay to the order of Scholar University" drawn on Rikki's account in State Bank to pay her tuition. Rikki is

A cashier's check is an instrument in which a bank draws a check on itself.

On Monday morning, Bob deposits into his account at County Bank a $500 check from Dyna, who also has an account at County Bank. On that same day, this check is considered

When a bank pays a check on which the drawer's signature is forged, generally the customer suffers the loss.

Bank customers cannot demand that their original canceled checks be returned with their monthly statement.

The death of a customer immediately revokes a bank's authority to pay an item.

No financial institution can disclose nonpublic personal information about a consumer to an unaffiliated third party under any circumstances.

A customer can escape liability for failing to notify the bank of forged or altered checks when the customer can prove that the bank was negligent.

Scott presents an instrument that states "pay to the order of Scott" to Town Bank for payment. This instrument is the most common type of negotiable instrument, which is

A customer has two days to discover and notify the bank of any error on the monthly statement involving an electronic transfer of funds.