§ 6A-4.1-204 - Refund of payment and duty of customer to report with respect to unauthorized payment order.
SECTION 6A-4.1-204
§ 6A-4.1-204 Refund of payment and duty ofcustomer to report with respect to unauthorized 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 § 6A-4.1-202, or (ii) not enforceable, in whole orin part, against the customer under § 6A-4.1-203, the bank shall refundany payment 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 from thebank on the amount to be refunded if the customer fails to exercise ordinarycare to determine that the order was not authorized by the customer and tonotify the bank of the relevant facts within a reasonable time not exceedingninety (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 as statedin this section.
(b) Reasonable time under subsection (a) may be fixed byagreement as stated in § 6A-1-302(b), but the obligation of a receivingbank to refund payment as stated in subsection (a) may not otherwise be variedby agreement.