§ 554.3404

554.3404 Impostors — fictitious payees. 1. If an impostor, by use of the mails or otherwise, induces the issuer of an instrument to issue the instrument to the impostor, or to a person acting in concert with the impostor,by impersonating the payee of the instrument or a person authorized to act for the payee,an endorsement of the instrument by any person in the name of the payee is effective as theendorsement of the payee in favor of a person who, in good faith, pays the instrument ortakes it for value or for collection. 2. If a person whose intent determines to whom an instrument is payable (section 554.3110, subsection 1 or 2) does not intend the person identified as payee to have anyinterest in the instrument, or the person identified as payee of an instrument is a fictitiousperson, the following rules apply until the instrument is negotiated by special endorsement: a. Any person in possession of the instrument is its holder.b. An endorsement by any person in the name of the payee stated in the instrument is effective as the endorsement of the payee in favor of a person who, in good faith, pays theinstrument or takes it for value or for collection. 3.

in the name of the payee stated in the instrument is effective as the endorsement of the payee in favor of a person who, in good faith, pays theinstrument or takes it for value or for collection. 3. Under subsection 1 or 2, an endorsement is made in the name of a payee if it is made in a name substantially similar to that of the payee or the instrument, whether or not endorsed,is deposited in a depositary bank to an account in a name substantially similar to that of thepayee. 4. With respect to an instrument to which subsection 1 or 2 applies, if a person paying the instrument or taking it for value or for collection fails to exercise ordinary care in paying ortaking the instrument and that failure substantially contributes to loss resulting from paymentof the instrument, the person bearing the loss may recover from the person failing to exerciseordinary care to the extent the failure to exercise ordinary care contributed to the loss. 94 Acts, ch 1167, §51, 121, 122; 2013 Acts, ch 30, §261Referred to in §554.3417, 554.4208 Sat Dec 23 01:56:54 2023 Iowa Code 2024, Section 554.3404 (28, 0)