8.4A-204 - A-204. Refund of payment and duty of customer to report with respect to unauthorized payment order. - Virginia Statutes

§ 8.4A-204. Refund of payment and duty of customer to report with respect tounauthorized payment order.

(a) If a receiving bank accepts a payment order issued in the name of itscustomer as sender which is (i) not authorized and not effective as the orderof the customer under § 8.4A-202, or (ii) not enforceable, in whole or inpart, against the customer under § 8.4A-203, the bank shall refund anypayment of the payment order received from the customer to the extent thebank is not entitled to enforce payment and shall pay interest on therefundable amount calculated from the date the bank received payment to thedate of the refund. However, the customer is not entitled to interest fromthe bank on the amount to be refunded if the customer fails to exerciseordinary care to determine that the order was not authorized by the customerand to notify the bank of the relevant facts within a reasonable time notexceeding 90 days after the date the customer received notification from thebank that the order was accepted or that the customer's account was debitedwith respect to the order. The bank is not entitled to any recovery from thecustomer on account of a failure by the customer to give notification asstated in this section.

(b) Reasonable time under subsection (a) of this section may be fixed byagreement as stated in subsection (b) of § 8.1A-302, but the obligation of areceiving bank to refund payment as stated in subsection (a) of this sectionmay not otherwise be varied by agreement.

(1990, c. 9; 2003, c. 353.)