Exam 27: A: Checks,the Banking System,and E-Money

On Monday,Eve deposits in her account at First State Bank a local check for $500.After 5:00 p.m.on Friday,from these funds,Eve can withdraw no more than

No one can refuse to accept a substitute check as proof of payment.

If a customer's debit card is lost or stolen and used without permission,the customer shall be required to pay no more than $50 in any event.

A bank may charge a postdated check against a customer's account.

Fact Pattern 27-1B Echo takes her car to Fix-It,Inc. ,which repairs the car and bills Echo for $500.Echo writes out a check drawn on Capital Bank,but later,believing that Fix-It did not repair the car properly,issues a stop-payment order. -Refer to Fact Pattern 27-1B.If Capital Bank pays the check,Capital

Kirk presents an instrument that states "pay to the order of Liv" to Metro Bank for payment.This is a special type of draft drawn on a bank,ordering the bank to pay a fixed amount of money on demand.This is

Delilah's debit card,issued by Encarta Bank,is stolen and used without Delilah's permission.Delilah tells the bank within thirty days.Delilah may be re?quired to pay no more than

Fact Pattern 27-2B Thom draws a check,on his account in State Bank in New York,payable to Digital Computers,Inc. ,in San Francisco.Digital deposits the check in its ac?count at First National Bank.First National deposits the check in the Federal Reserve Bank of San Francisco,which transfers it to the Federal Reserve Bank of New York.That Federal Reserve Bank sends the check to State Bank. -Refer to Fact Pattern 27-2B.Thom's bank is

When a bank properly dishonors a check for insufficient funds,it has no liability to the customer.

Ian buys a cell phone in Jiffy Mart,using the means that accounts for more retail payments than any other.This means of payment is

Fact Pattern 27-1B Echo takes her car to Fix-It,Inc. ,which repairs the car and bills Echo for $500.Echo writes out a check drawn on Capital Bank,but later,believing that Fix-It did not repair the car properly,issues a stop-payment order. -Refer to Fact Pattern 27-1B.Capital Bank

Under Check 21,the maximum time that a bank can hold funds from deposited checks before making them available to the depositor will increase.

Tiny authorizes United Bank to make transfers from his account to make payments on his debt to Vic's Auto Dealership,which sold Tiny the car that serves as collateral for the debt.After three payments,Vic's repos?sesses the car and refuses to return it.Tiny phones the bank to stop the payments and follows up with a confirm?ing letter.The bank fails to stop the next two payments,and Vic's refuses to refund anything.Can Tiny get his money from the bank? Explain.

A bank that has certified a check is under no obligation to accept it.

Fact Pattern 27-2B Thom draws a check,on his account in State Bank in New York,payable to Digital Computers,Inc. ,in San Francisco.Digital deposits the check in its ac?count at First National Bank.First National deposits the check in the Federal Reserve Bank of San Francisco,which transfers it to the Federal Reserve Bank of New York.That Federal Reserve Bank sends the check to State Bank. -Refer to Fact Pattern 27-2B.Digital's bank is

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

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

Daisy writes a check to Elvita on her account at First Savings Bank.The bank dishonors the check even though Daisy has sufficient funds in her ac?count.The bank is

Sullivan signs a check "pay to the order of Tilly" drawn on Sullivan's account in Universal Bank.Velma forges Tilly's indorsement,Washington Bank cashes the check.Velma disappears.Universal pays Washington and debits Sullivan's account.Most likely,the ultimate loss will fall on

Steve steals one of Tricia's checks and forges her signature.Tricia's bank,Unity Bank,pays the check.Tricia can recover from