Question 1

National Bank's policy is to examine signatures only on checks exceeding $2,500. Checks for lesser amounts are selected randomly for signature verification. National fails to verify a forged drawer's signature on a check for $1,500 drawn on Odel's account. Most likely liable for the amount is

A) National Bank for a failing to exercise due care.
B) National Bank's other customers to whom the loss can be "spread."
C) Odel on the ground that she was a fictitious drawer.
D) the specific National employee who did not verify the signature.

A

Accepted Answer

National Bank has a policy of examining signatures only on checks exceeding $2,500, but they also select random checks for signature verification. By failing to verify a forged signature on a check for $1,500 drawn on Odel's account, National Bank did not exercise due care in their policy. Therefore, National Bank is most likely liable for the amount. The other choices are unlikely, as the loss cannot be spread to other customers without their consent and there is no evidence to suggest that Odel was a fictitious drawer. And while the employee who did not verify the signature may be at fault, the primary liability lies with the bank itself for failing to follow their own policy.

Question 2

Dustin loans Concepcion $50. Concepcion can aid sustainability by&#10;A) sending a paper check in payment.&#10;B) sending payment to Dustin's e-mail address or cell phone number.&#10;C) spreading payment over several installments.&#10;D) loaning the $50 to Blair.

Accepted Answer

Sending payment to Dustin's e-mail address or cell phone number would likely involve using a digital payment method such as Venmo, PayPal, or a bank transfer, which is a more sustainable option than sending a paper check. The other options do not directly relate to aiding sustainability.

Question 3

Phoebe sends Rosinda a cashier's check for $1,000. Rosinda deposits the check into her account at Security Bank. The next business day, the bank confirms a $1,000 increase in Rosinda's account. She then wires Phoebe $150 for "fees." Later, the bank discovers that the check is a fake. Most likely, the loss falls to

A) Rosinda.
B) Security Bank.
C) Rosinda and Security Bank in equal measure.
D) no one.

A

Accepted Answer

In this scenario, the loss falls to Rosinda as she deposited the fake check into her account and withdrew funds before the bank discovered the fraud. As per the usual banking practice, the depositor is responsible for verifying the authenticity of the check before depositing it. Therefore, Rosinda bears the loss of $1,000 plus the additional $150 she sent Phoebe for the fees.

Question 4

In accord with banking industry practices, US Bank's computers are pro?grammed to verify signatures only on checks exceeding $1,000. US Bank cashes a check for $900 on the forged signature of its customer Vita. Under UCC Article 3, with respect to reasonable commercial standards, US Bank is

A) definitely liable.
B) definitely not liable.
C) liable if any other bank verifies all signatures on all checks.
D) liable if Vita has never written or cashed a check for more than $899.

Accepted Answer

The answer of In accord with banking industry practices, US...

Deck 57: for Unit Five