554.12204 Refund of payment and duty of customer to report with respect to unauthorized payment order. 1. If a receiving bank accepts a payment order issued in the name of its customer as sender which is not authorized and not effective as the order of the customer under section554.12202, or which is not enforceable, in whole or in part, against the customer under section554.12203, the bank shall refund any payment related to the payment order received from thecustomer to the extent the bank is not entitled to enforce payment and shall pay interest onthe refundable amount calculated from the date the bank received payment to the date of therefund. However, the customer is not entitled to interest from the bank on the amount to berefunded if the customer fails to exercise ordinary care to determine that the order was notauthorized by the customer and to notify the bank of the relevant facts within a reasonabletime not exceeding ninety days after the date the customer received notification from thebank that the order was accepted or that the customer’s account was debited with respect tothe order. easonabletime not exceeding ninety days after the date the customer received notification from thebank that the order was accepted or that the customer’s account was debited with respect tothe order. The bank is not entitled to any recovery from the customer as a result of a failureby the customer to give notification as stated in this section. 2. Reasonable time under subsection 1 may be fixed by agreement as provided in section 554.1302, subsection 2, but the obligation of a receiving bank to refund payment as stated insubsection 1 may not otherwise be varied by agreement. 92 Acts, ch 1146, §12; 2007 Acts, ch 41, §34Referred to in §554.12402 Sat Dec 23 11:02:50 2023 Iowa Code 2024, Section 554.12204 (24, 0)
Iowa Legal Code