674.406
Customer’s duty to discover and report unauthorized signature or alteration.
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674.406 Customer’s duty to discover and report unauthorized signature or alteration.—
(1) A bank that sends or makes available to a customer a statement of account showing payment of items for the account shall either return or make available to the customer the items paid or provide information in the statement of account sufficient to allow the customer reasonably to identify the items paid. The statement of account provides sufficient information if the item is described by item number, amount, and date of payment.
(2) If the items are not returned to the customer, the person retaining the items shall either retain the items or, if the items are destroyed, maintain the capacity to furnish legible copies of the items until the expiration of 5 years after receipt of the items. A customer may request an item from the bank that paid the item, and that bank must provide in a reasonable time either the item or, if the item has been destroyed or is not otherwise obtainable, a legible copy of the item.
(3) If a bank sends or makes available a statement of account or items pursuant to subsection (1), the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item or because a purported signature by or on behalf of the customer was not authorized. If, based on the statement or items provided, the customer should reasonably have discovered the unauthorized payment, the customer must promptly notify the bank of the relevant facts.
(4) If the bank proves that the customer failed, with respect to an item, to comply with the duties imposed on the customer by subsection (3), the customer is precluded from asserting against the bank:
(a) The customer’s unauthorized signature or any alteration on the item, if the bank also proves that it suffered a loss by reason of the failure; and
(b) The customer’s unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding 30 days, in which to examine the item or statement of account and notify the bank.
(5) If subsection (4) applies and the customer proves that the bank failed to exercise ordinary care in paying the item and that the failure substantially contributed to loss, the loss is allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with subsection (3) and the failure of the bank to exercise ordinary care contributed to the loss. If the customer proves that the bank did not pay the item in good faith, the preclusion under subsection (4) does not apply.
(6) Without regard to care or lack of care of either the customer or the bank, a customer who does not within 180 days after the statement or items are made available to the customer (subsection (1)) discover and report the customer’s unauthorized signature on or any alteration on the item or who does not, within 1 year after that time, discover and report any unauthorized endorsement is precluded from asserting against the bank the unauthorized signature or alteration. If there is a preclusion under this subsection, the payor bank may not recover for breach of warranty under s. 674.2081 with respect to the unauthorized signature or alteration to which the preclusion applies.
History.—s. 1, ch. 65-254; s. 43, ch. 92-82; s. 24, ch. 2004-340; s. 107, ch. 2004-390.
Note.—s. 4-406, U.C.C.; supersedes s. 659.37.
Notes of Decisions
Cited in 27
cases, 1981–2016 · leading case: Anderson v. Branch Banking & Trust Co. ex rel. BankAtlantic, LLC
Anderson v. Branch Banking & Trust Co. ex rel. BankAtlantic, LLC (2015)
“See Fla. Stat. § 674.406 (3) (requiring customer to “exercise reasonable promptness in examining the statement or the items to determine whether- any payment was not authorized’;’ and “promptly notify, the bank of the-relevant facts”); see also Cheese & Grill Rest.”
Gilbert & Caddy, P.A. v. JP Morgan Chase Bank, N.A. (2016)
“Moreover, the Agreements’ notification provision does not impermissibly expand or modify Fla. Stat. Ann. § 674.406 . Plaintiff seeks to avoid the Agreements’ clear terms by arguing that application of the 30-day notification provision to the Sacks Transfers impermissibly…”
Space Distributors, Inc. v. FLAGSHIP BANK, ETC. (1981)
“Section 674.406(1), Florida Statutes (1979), imposes the following duties upon a bank customer: When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request…”
Gerber v. CITY NAT. BANK OF FLORIDA (1993)
“Section 674.406 only imposes on bank customers, who are in a better position to detect forgeries than bank personnel, a duty to notify a bank of an unauthorized signature in order to facilitate discovery and prevention of further wrongdoing.”
Ossip-Harris Ins., Inc. v. BARNETT BANK OF SO. FLA., NA (1983)
“Barnett's answer raised several affirmative defenses, inter alia, that Ossip failed to detect and report the forgeries to Barnett pursuant to Section 674.406, Florida Statutes (1981), and that Ossip's negligence substantially contributed to the making of the forged checks.”
Redland Co., Inc. v. Bank of America Corp. (2009)
“3d DCA 1998); Fla. Stat. § 674.406 ; see also Cheese & Grill, 970 So.”
Flagship Bank of Seminole v. Complete Interiors, Inc. (1984)
“*339 To support the trial court's judgment, appellee relies on section 674.406, Florida Statutes (1981) [1] .”
Burdine-Coakley v. Capital Bank (1989)
“(1983), was the plaintiff's failure to comply with section 674.406, Florida Statutes (1983).”
CHEESE & GRILL RESTAURANT v. Wachovia Bank (2007)
“Subsection 674.406(1) of the Florida Statutes provides that a statement of account provided by a bank is sufficient if each item is described by item number, amount, and date of payment.”
Cole Taylor Bank v. Shannon (2000)
“For example, Cole Taylor contends that under section 674.406, Florida Statutes (1997), Mrs.”
Southern Contract Carpe, Inc. v. Cty. Nat. Bk. of S. Fla. (1988)
“The lower court entered judgment for the defendant on the ground that the action was barred by the statute of limitations contained in section 674.406(4), Florida Statutes (1985) (section 4-406(4) of the Uniform Commercial Code): (4) Without regard to care or lack of care of…”
FLA. FED. SAV. & LOAN ASS'N v. Martin (1981)
“MARTIN; and that pursuant to the preclusionary rules set forth in Section 674.406 of the Florida Statutes that as a matter of law, the depositor is entitled to have his account reimbursed where the savings and loan association failed to comply with this deposit agreement and…”
— 674.406(1) — 3 cases
Space Distributors, Inc. v. FLAGSHIP BANK, ETC. (1981)
“Section 674.406(1), Florida Statutes (1979), imposes the following duties upon a bank customer: When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request…”
FLA. FED. SAV. & LOAN ASS'N v. Martin (1981)
“MARTIN; and that pursuant to the preclusionary rules set forth in Section 674.406 of the Florida Statutes that as a matter of law, the depositor is entitled to have his account reimbursed where the savings and loan association failed to comply with this deposit agreement and…”
CHEESE & GRILL RESTAURANT v. Wachovia Bank (2007)
“Subsection 674.406(1) of the Florida Statutes provides that a statement of account provided by a bank is sufficient if each item is described by item number, amount, and date of payment.”
— 674.406(2) — 2 cases
CHEESE & GRILL RESTAURANT v. Wachovia Bank (2007)
“Subsection 674.406(1) of the Florida Statutes provides that a statement of account provided by a bank is sufficient if each item is described by item number, amount, and date of payment.”
Space Distributors, Inc. v. FLAGSHIP BANK, ETC. (1981)
“Section 674.406(1), Florida Statutes (1979), imposes the following duties upon a bank customer: When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request…”
— 674.406(2)(b) — 2 cases
Ossip-Harris Ins., Inc. v. BARNETT BANK OF SO. FLA., NA (1983)
“Barnett's answer raised several affirmative defenses, inter alia, that Ossip failed to detect and report the forgeries to Barnett pursuant to Section 674.406, Florida Statutes (1981), and that Ossip's negligence substantially contributed to the making of the forged checks.”
Gerber v. CITY NAT. BANK OF FLORIDA (1993)
“Section 674.406 only imposes on bank customers, who are in a better position to detect forgeries than bank personnel, a duty to notify a bank of an unauthorized signature in order to facilitate discovery and prevention of further wrongdoing.”
— 674.406(3) — 4 cases
Redland Co., Inc. v. Bank of America Corp. (2009)
“3d DCA 1998); Fla. Stat. § 674.406 ; see also Cheese & Grill, 970 So.”
Space Distributors, Inc. v. FLAGSHIP BANK, ETC. (1981)
“Section 674.406(1), Florida Statutes (1979), imposes the following duties upon a bank customer: When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request…”
Burdine-Coakley v. Capital Bank (1989)
“(1983), was the plaintiff's failure to comply with section 674.406, Florida Statutes (1983).”
Ossip-Harris Ins., Inc. v. BARNETT BANK OF SO. FLA., NA (1983)
“Barnett's answer raised several affirmative defenses, inter alia, that Ossip failed to detect and report the forgeries to Barnett pursuant to Section 674.406, Florida Statutes (1981), and that Ossip's negligence substantially contributed to the making of the forged checks.”
— 674.406(4) — 10 cases
Gerber v. CITY NAT. BANK OF FLORIDA (1993)
“Section 674.406 only imposes on bank customers, who are in a better position to detect forgeries than bank personnel, a duty to notify a bank of an unauthorized signature in order to facilitate discovery and prevention of further wrongdoing.”
Space Distributors, Inc. v. FLAGSHIP BANK, ETC. (1981)
“Section 674.406(1), Florida Statutes (1979), imposes the following duties upon a bank customer: When a bank sends to its customer a statement of account accompanied by items paid in good faith in support of the debit entries or holds the statement and items pursuant to a request…”
Southern Contract Carpe, Inc. v. Cty. Nat. Bk. of S. Fla. (1988)
“The lower court entered judgment for the defendant on the ground that the action was barred by the statute of limitations contained in section 674.406(4), Florida Statutes (1985) (section 4-406(4) of the Uniform Commercial Code): (4) Without regard to care or lack of care of…”
Burdine-Coakley v. Capital Bank (1989)
“(1983), was the plaintiff's failure to comply with section 674.406, Florida Statutes (1983).”
— 674.406(6) — 4 cases
Anderson v. Branch Banking & Trust Co. ex rel. BankAtlantic, LLC (2015)
“See Fla. Stat. § 674.406 (3) (requiring customer to “exercise reasonable promptness in examining the statement or the items to determine whether- any payment was not authorized’;’ and “promptly notify, the bank of the-relevant facts”); see also Cheese & Grill Rest.”
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