Florida Statute 674.406 - Full Text and Legal Analysis

The 2025 Florida Statutes

Title XXXIX
COMMERCIAL RELATIONS

Chapter 674
UNIFORM COMMERCIAL CODE: BANK DEPOSITS AND COLLECTIONS

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F.S. 674.406

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.

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F.S. 674.406 on CourtListener

Amendments to 674.406

Annotations, Discussions, Cases:

Cases Citing Statute 674.406

Total Results: 24

Redland Co., Inc. v. Bank of America Corp.

568 F.3d 1232, 2009 U.S. App. LEXIS 7776, 2009 WL 1492616

Court of Appeals for the Eleventh Circuit | Filed: Apr 13, 2009 | Docket: 399413

Cited 21 times | Published

So.2d 596, 597 (Fla. 3d DCA 1998); Fla. Stat. § 674.406; see also Cheese & Grill, 970 So.2d at 375. Cheese

Federal Insurance Company, Cross-Appellee v. Ncnb National Bank of North Carolina, Cross-Appellant, Ncnb National Bank of Florida

958 F.2d 1544, 17 U.C.C. Rep. Serv. 2d (West) 497, 1992 U.S. App. LEXIS 7572, 1992 WL 69636

Court of Appeals for the Eleventh Circuit | Filed: Apr 24, 1992 | Docket: 126991

Cited 16 times | Published

We agree with Federal. Florida statute § 674.406, which provides a defense to a bank if a customer

Space Distributors, Inc. v. FLAGSHIP BANK, ETC.

402 So. 2d 586, 32 U.C.C. Rep. Serv. (West) 517

District Court of Appeal of Florida | Filed: Aug 26, 1981 | Docket: 1313302

Cited 11 times | Published

dismissal was based on the notice requirement of section 674.406(4), Florida Statutes (1979). As to the rest

Cole Taylor Bank v. Shannon

772 So. 2d 546, 2000 WL 1233602

District Court of Appeal of Florida | Filed: Sep 1, 2000 | Docket: 1729395

Cited 9 times | Published

For example, Cole Taylor contends that under section 674.406, Florida Statutes (1997), Mrs. Shannon was

Lawrence v. CENT. PLAZA BK. AND TRUST CO.

469 So. 2d 201, 10 Fla. L. Weekly 1302, 41 U.C.C. Rep. Serv. (West) 182, 1985 Fla. App. LEXIS 14220

District Court of Appeal of Florida | Filed: May 22, 1985 | Docket: 620005

Cited 9 times | Published

defenses guaranteed to the County Bank under section 674.406, Florida Statutes (1983), has no merit because

Anderson v. Branch Banking & Trust Co. ex rel. BankAtlantic, LLC

119 F. Supp. 3d 1328, 87 U.C.C. Rep. Serv. 2d (West) 182, 2015 U.S. Dist. LEXIS 98235, 2015 WL 4554921

District Court, S.D. Florida | Filed: Jul 28, 2015 | Docket: 64303285

Cited 7 times | Published

406(6) (items), 670.505 (funds transfers). Under § 674.406, the customer is obligated to review account statements

Gerber v. CITY NAT. BANK OF FLORIDA

619 So. 2d 328, 20 U.C.C. Rep. Serv. 2d (West) 574, 1993 Fla. App. LEXIS 4938, 1993 WL 140138

District Court of Appeal of Florida | Filed: May 4, 1993 | Docket: 1382584

Cited 7 times | Published

complaint against a bank as being barred by Section 674.406(4), Florida Statutes (1991). Based upon our

Flagship Bank of Seminole v. Complete Interiors, Inc.

450 So. 2d 337, 38 U.C.C. Rep. Serv. (West) 957, 1984 Fla. App. LEXIS 13406

District Court of Appeal of Florida | Filed: May 24, 1984 | Docket: 1433315

Cited 4 times | Published

trial court's judgment, appellee relies on section 674.406, Florida Statutes (1981)[1]. Subsection (1)

FLA. FED. SAV. & LOAN ASS'N v. Martin

400 So. 2d 151, 33 U.C.C. Rep. Serv. (West) 1427

District Court of Appeal of Florida | Filed: Jun 19, 1981 | Docket: 1263355

Cited 4 times | Published

pursuant to the preclusionary rules set forth in Section 674.406 of the Florida Statutes that as a matter of

CHEESE & GRILL RESTAURANT v. Wachovia Bank

970 So. 2d 372, 2007 Fla. App. LEXIS 16708, 2007 WL 3087222

District Court of Appeal of Florida | Filed: Oct 24, 2007 | Docket: 1324031

Cited 3 times | Published

unauthorized endorsement on the back of the checks. [2] § 674.406(2), Fla. Stat. (1999). [3] Although our research

Southern Contract Carpe, Inc. v. Cty. Nat. Bk. of S. Fla.

528 So. 2d 42, 1988 WL 62004

District Court of Appeal of Florida | Filed: Jun 21, 1988 | Docket: 1717322

Cited 3 times | Published

by the statute of limitations contained in section 674.406(4), Florida Statutes (1985) (section 4-406(4)

Ossip-Harris Ins., Inc. v. BARNETT BANK OF SO. FLA., NA

428 So. 2d 363, 35 U.C.C. Rep. Serv. (West) 1604, 1983 Fla. App. LEXIS 19309

District Court of Appeal of Florida | Filed: Mar 22, 1983 | Docket: 1375550

Cited 3 times | Published

report the forgeries to Barnett pursuant to Section 674.406, Florida Statutes (1981), and that Ossip's

Gilbert & Caddy, P.A. v. JP Morgan Chase Bank, N.A.

193 F. Supp. 3d 1294, 2016 U.S. Dist. LEXIS 183865, 2016 WL 4613388

District Court, S.D. Florida | Filed: Jun 15, 2016 | Docket: 64309452

Cited 2 times | Published

modification and expansion of section 674.406 of the Florida Statutes (“§ 674.406”), and that regardless, Chase’s

Bank of America v. PUTNAL SEED AND GRAIN

965 So. 2d 300, 63 U.C.C. Rep. Serv. 2d (West) 1029, 2007 Fla. App. LEXIS 14525, 2007 WL 2700163

District Court of Appeal of Florida | Filed: Sep 18, 2007 | Docket: 1509182

Cited 2 times | Published

chapter 674. § 674.103(1), Fla. Stat. (2002). Section 674.406(6), Florida Statutes (2002), states that a

Burdine-Coakley v. Capital Bank

542 So. 2d 1019, 9 U.C.C. Rep. Serv. 2d (West) 1311, 14 Fla. L. Weekly 782, 1989 Fla. App. LEXIS 1577, 1989 WL 27904

District Court of Appeal of Florida | Filed: Mar 28, 1989 | Docket: 468840

Cited 2 times | Published

precluded from this action by Florida Statutes § 674.406 due to his failure to review the statements and

Key Bank v. First United Land Title Co.

502 So. 2d 1280, 12 Fla. L. Weekly 352, 3 U.C.C. Rep. Serv. 2d (West) 657, 1987 Fla. App. LEXIS 6416

District Court of Appeal of Florida | Filed: Jan 23, 1987 | Docket: 1180834

Cited 2 times | Published

third affirmative defenses were predicated on section 674.406, Florida Statutes (1985). Subsection (1) of

First Nat. Bank v. Keshishian

427 So. 2d 313, 35 U.C.C. Rep. Serv. (West) 1250

District Court of Appeal of Florida | Filed: Feb 23, 1983 | Docket: 1739659

Cited 2 times | Published

matter proceeds to trial, but with regard to section 674.406 it appears the customer must establish the

Lowenstein v. BARNETT BANK OF SO. FLA.

720 So. 2d 596, 1998 WL 764694

District Court of Appeal of Florida | Filed: Oct 21, 1998 | Docket: 2518647

Cited 1 times | Published

under section 674.406(4) Florida Statutes (1991), moved after January 1, 1993, to section 674.406(6) Florida

Coral Gables Federal Savings & Loan Ass'n v. City of Opa-Locka

516 So. 2d 989, 12 Fla. L. Weekly 2677, 6 U.C.C. Rep. Serv. 2d (West) 496, 1987 Fla. App. LEXIS 11120

District Court of Appeal of Florida | Filed: Nov 24, 1987 | Docket: 64631497

Cited 1 times | Published

promptly reconcile bank statements as required by section 674.406, Florida Statutes (1981)); First Nat’l Bank

Carlow v. Colonial Bank, N.A. (In re Carlow)

370 B.R. 402, 20 Fla. L. Weekly Fed. B 457, 2007 Bankr. LEXIS 2064

United States Bankruptcy Court, S.D. Florida. | Filed: Jun 13, 2007 | Docket: 65783286

Published

Bank relies upon UCC § 4-406, Florida Statutes § 674.406, for the proposition that if a bank makes account

Coutant v. SunBank South Florida, N.A.

813 So. 2d 1037, 2002 Fla. App. LEXIS 4964, 2002 WL 561700

District Court of Appeal of Florida | Filed: Apr 17, 2002 | Docket: 64814345

Published

governing bank-customer relations contained in section 674.406, Florida Statutes. As those provisions are

Lowenstein v. Barnett Bank of South Florida, N.A.

789 So. 2d 1012, 36 U.C.C. Rep. Serv. 2d (West) 836, 1998 Fla. App. LEXIS 12412, 1998 WL 670353

District Court of Appeal of Florida | Filed: Oct 1, 1998 | Docket: 64806877

Published

customer was precluded from recovery under section 674.406(4) Florida Statutes (1995). After a hearing

Sun Bank, NA v. Merrill Lynch

637 So. 2d 279, 1994 WL 140738

District Court of Appeal of Florida | Filed: Apr 22, 1994 | Docket: 423058

Published

Sun Bank next argues that Florida Statutes section 674.406 permits a customer to make a claim upon a drawee

Patterson Produce Co. v. First National Bank of Florida

475 So. 2d 1368, 10 Fla. L. Weekly 2292, 41 U.C.C. Rep. Serv. (West) 1369, 1985 Fla. App. LEXIS 16159

District Court of Appeal of Florida | Filed: Oct 4, 1985 | Docket: 64614477

Published

judgment in favor of the bank on the authority of section 674.406, Florida Statutes (1983), as to count I of