400.4A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order. - Missouri Statutes

Refund of payment and duty of customer to report with respect tounauthorized payment order.

400.4A-204. (a) If a receiving bank accepts a paymentorder issued in the name of its customer as sender which is (i)not authorized and not effective as the order of the customerunder section 400.4A-202, or (ii) not enforceable, in whole or inpart, against the customer under section 400.4A-203, the bankshall refund any payment of the payment order received from thecustomer to the extent the bank is not entitled to enforcepayment and shall pay interest on the refundable amountcalculated from the date the bank received payment to the date ofthe refund. However, the customer is not entitled to interestfrom the bank on the amount to be refunded if the customer failsto exercise ordinary care to determine that the order was notauthorized by the customer and to notify the bank of the relevantfacts within a reasonable time not exceeding ninety days afterthe date the customer received notification from the bank thatthe order was accepted or that the customer's account was debitedwith respect to the order. The bank is not entitled to anyrecovery from the customer on account of a failure by thecustomer to give notification as stated in this section.

(b) Reasonable time under subsection (a) may be fixed byagreement as stated in section 400.1-204(1), but the obligationof a receiving bank to refund payment as stated in subsection (a)may not otherwise be varied by agreement.

(L. 1992 S.B. 448)