§ 25-4A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order. - North Carolina Statutes

PART 2.

ISSUE AND ACCEPTANCE OF PAYMENTORDER.

§ 25‑4A‑204. Refund of payment and duty of customer to report with respect to unauthorizedpayment order.

(a)        If a receiving bankaccepts a payment order issued in the name of its customer as sender which is (i)not authorized and not effective as the order of the customer under G.S. 25‑4A‑202,or (ii) not enforceable, in whole or in part, against the customer under G.S.25‑4A‑203, the bank shall refund any payment of the payment orderreceived from the customer to the extent the bank is not entitled to enforcepayment and shall pay interest on the refundable amount calculated from thedate the bank received payment to the date of the refund. However, the customeris not entitled to interest from the bank on the amount to be refunded if thecustomer fails to exercise ordinary care to determine that the order was notauthorized by the customer and to notify the bank of the relevant facts withina reasonable time not exceeding 90 days after the date the customer receivednotification from the bank that the order was accepted or that the customer'saccount was debited with respect to the order. The bank is not entitled to anyrecovery from the customer on account of a failure by the customer to givenotification as stated in this section.

(b)        Reasonable timeunder subsection (a) of this section may be fixed by agreement as stated inG.S. 25‑1‑302(b), but the obligation of a receiving bank to refundpayment as stated in subsection (a) of this section may not otherwise be variedby agreement. (1993,c. 157, s. 1; 2006‑112, s. 18.)