Exam 22: Checks and Banking in the Digital Age

A bank that pays a customer's check with a forged drawer's signature can generally pass the loss onto the customer.

Horace can write checks on his account at InterCity Bank. Jemma steals the checks, forges Horace's signature, and cashes the checks at InterCity. The bank is excused from any liability if, after receipt of the first forged check, Horace fails to report the forgeries within

The Federal Reserve System acts as a clearinghouse where banks exchange checks.

Jackie inserts a debit card issued by her bank into a machine and keys in her personal identification number. She is then able to withdraw $500 in cash. Jackie is using

Clyde issues a check payable to Discount Mart. Elle, Discount's cashier, forges the store's indorsement and deposits the check in her bank ac?count. Clyde's bank, Main Street Bank, pays the check. Clyde can recover from

Julia opens a checking account with Washington Bank and deposits funds into the account. Julia and Washington Bank

Shakira issues a check drawn on Thrifty Bank to Ranch & Farm Supply to pay for a rototiller. Later, Shakira discovers a defect in the device 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

Each bank in a collection chain must pass a check on before noon of the day of its receipt.

A certified check is a check that has been signed by a notary public.

Trudy forges Uma's signature on a check "payable to the order of Trudy" drawn on Uma's account in Verity Bank. Most likely, if the bank pays the check

A check is not a substitute for cash.

Gaining unauthorized access to an electronic fund transfer system is a felony.

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

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

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

An oral stop payment order is valid for fourteen days.

Daria writes a check for $100 drawn on Village Bank and presents it to Fast Cash, Inc., for payment. If the check is not backed by sufficient funds, Daria may be prosecuted for

Jon writes a check to LocoMotion, Inc., as payment for a golf cart but soon discov?ers the cart is broken. He goes to Fairway Bank, the drawee, and orally author?izes Lolly, a bank officer, to stop payment on the check. This order is valid for

A bank is not obligated to pay an uncertified check presented less than six months from its date.

A check is a special type of draft.