410.103 History
History: 1991 a. 304.
410.104
410.104
Funds transfer; definitions. In this chapter:
410.104(1)
(1) "Funds transfer" means the series of transactions, beginning with the originator's payment order, made for the purpose of making payment to the beneficiary of the order. "Funds transfer" includes any payment order issued by the originator's bank or an intermediary bank intended to carry out the originator's payment order. A funds transfer is completed by acceptance by the beneficiary's bank of a payment order for the benefit of the beneficiary of the originator's payment order.
410.104(2)
(2) "Intermediary bank" means a receiving bank other than the originator's bank or the beneficiary's bank.
410.104(3)
(3) "Originator" means the sender of the first payment order in a funds transfer.
410.104(4)
(4) "Originator's bank" means the receiving bank to which the payment order of the originator is issued if the originator is not a bank or the originator if the originator is a bank.
410.104 History
History: 1991 a. 304.
410.105(1)(a)
(a) "Authorized account" means a deposit account of a customer in a bank designated by the customer as a source of payment of payment orders issued by the customer to the bank. If a customer does not so designate an account, any account of the customer is an authorized account if payment of a payment order from that account is not inconsistent with a restriction on the use of that account.
410.105(1)(b)
(b) "Bank" means a person engaged in the business of banking and includes a savings bank, savings and loan association, credit union, and trust company. A branch or separate office of a bank is a separate bank for purposes of this chapter.
410.105(1)(c)
(c) "Customer" means a person, including a bank, having an account with a bank or from whom a bank has agreed to receive payment orders.
410.105(1)(d)
(d) "Funds-transfer business day" of a receiving bank means the part of a day during which the receiving bank is open for the receipt, processing, and transmittal of payment orders and for cancellations and amendments of payment orders.
410.105(1)(e)
(e) "Funds-transfer system" means a wire transfer network, automated clearinghouse, or other communication system of a clearinghouse or other association of banks through which a payment order by a bank may be transmitted to the bank to which the order is addressed.
410.105(1)(f)
(f) "Good faith" means honesty in fact and the observance of reasonable commercial standards of fair dealing.
410.105(1)(g)
(g) "Prove" with respect to a fact means to meet the burden of establishing the fact.
410.105(2)
(2) Other definitions applying to this chapter and the sections in which they appear are:
410.105(3)
(3) The following definitions in
ch. 404 apply to this chapter:
410.105(4)
(4) In addition
ch. 401 contains general definitions and principles of construction and interpretation applicable throughout this chapter.
410.105 History
History: 1991 a. 304;
1995 a. 449.
410.106
410.106
Time payment order is received. 410.106(1)
(1) The time of receipt of a payment order or communication canceling or amending a payment order is determined by the rules applicable to receipt of a notice stated in
s. 401.201 (26) (b). A receiving bank may fix a cut-off time or times on a funds-transfer business day for the receipt and processing of payment orders and communications canceling or amending payment orders. Different cut-off times may apply to payment orders, cancellations, or amendments, or to different categories of payment orders, cancellations, or amendments. A cut-off time may apply to senders generally or different cut-off times may apply to different senders or categories of payment orders. If a payment order or communication canceling or amending a payment order is received after the close of a funds-transfer business day or after the appropriate cut-off time on a funds-transfer business day, the receiving bank may treat the payment order or communication as received at the opening of the next funds-transfer business day.
410.106(2)
(2) If this chapter refers to an execution date or payment date or states a day on which a receiving bank is required to take action, and the date or day does not fall on a funds-transfer business day, the next day that is a funds-transfer business day is treated as the date or day stated, unless the contrary is stated in this chapter.
410.106 History
History: 1991 a. 304.
410.107
410.107
Federal reserve regulations and operating circulars. Regulations of the board of governors of the federal reserve system and operating circulars of the federal reserve banks supersede any inconsistent provision of this chapter to the extent of the inconsistency.
410.107 History
History: 1991 a. 304.
410.108
410.108
Exclusion of consumer transactions governed by federal law. This chapter does not apply to a funds transfer any part of which is governed by the electronic fund transfer act,
15 USC 1693 to
1693r.
410.108 History
History: 1991 a. 304.
ISSUE AND ACCEPTANCE OF PAYMENT ORDER
410.201
410.201
Security procedure. "Security procedure" means a procedure established by agreement of a customer and a receiving bank to verify that a payment order or communication amending or canceling a payment order is that of the customer or to detect error in the transmission or the content of the payment order or communication. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures, or similar security devices. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a security procedure.
410.201 History
History: 1991 a. 304.
410.202
410.202
Authorized and verified payment orders. 410.202(1)(1) A payment order received by the receiving bank is the authorized order of the person identified as sender if that person authorized the order or is otherwise bound by it under the law of agency.
410.202(2)(a)(a) If a bank and its customer have agreed that the authenticity of payment orders issued to the bank in the name of the customer as sender will be verified pursuant to a security procedure, a payment order received by the receiving bank is effective as the order of the customer, whether or not authorized, if all of the following apply:
410.202(2)(a)1.
1. The security procedure is a commercially reasonable method of providing security against unauthorized payment orders.
410.202(2)(a)2.
2. The bank proves that it accepted the payment order in good faith and in compliance with the security procedure and any written agreement or instruction of the customer restricting acceptance of payment orders issued in the name of the customer.
410.202(2)(b)
(b) The bank is not required to follow an instruction that violates a written agreement with the customer or notice of which is not received at a time and in a manner affording the bank a reasonable opportunity to act on it before the payment order is accepted.
410.202(3)
(3) Commercial reasonableness of a security procedure is a question of law to be determined by considering the wishes of the customer that are expressed to the bank, the circumstances of the customer known to the bank, including the size, type, and frequency of payment orders normally issued by the customer to the bank, alternative security procedures offered to the customer, and security procedures in general use by customers and receiving banks similarly situated. A security procedure is considered to be commercially reasonable if all of the following apply:
410.202(3)(a)
(a) The security procedure was chosen by the customer after the bank offered, and the customer refused, a security procedure that was commercially reasonable for that customer.
410.202(3)(b)
(b) The customer expressly agreed in writing to be bound by any payment order, whether or not authorized, issued in the customer's name and accepted by the bank in compliance with the security procedure chosen by the customer.
410.202(4)
(4) In this chapter, "sender" includes the customer in whose name a payment order is issued if the order is the authorized order of the customer under
sub. (1), or it is effective as the order of the customer under
sub. (2).
410.202(5)
(5) This section applies to amendments and cancellations of payment orders to the same extent that it applies to payment orders.
410.202(6)
(6) Except as provided in this section and in
s. 410.203 (1) (a), rights and obligations arising under this section or
s. 410.203 may not be varied by agreement.
410.202 History
History: 1991 a. 304.
410.203
410.203
Unenforceability of certain verified payment orders. 410.203(1)(1) If an accepted payment order is not, under
s. 410.202 (1), an authorized order of a customer identified as sender, but is effective as an order of the customer pursuant to
s. 410.202 (2), the following rules apply:
410.203(1)(a)
(a) By express written agreement, the receiving bank may limit the extent to which it is entitled to enforce or retain payment of the payment order.
410.203(1)(b)
(b) The receiving bank is not entitled to enforce or retain payment of the payment order if the customer proves that the order was not caused, directly or indirectly, by any of the following:
410.203(1)(b)1.
1. A person entrusted at any time with duties to act for the customer with respect to payment orders or the security procedure.
410.203(1)(b)2.
2. A person who obtained access to transmitting facilities of the customer or who obtained, from a source controlled by the customer and without authority of the receiving bank, information facilitating breach of the security procedure, regardless of how the information was obtained or whether the customer was at fault. Information includes any access device, computer software, or the like.
410.203(2)
(2) This section applies to amendments of payment orders to the same extent that it applies to payment orders.
410.203 History
History: 1991 a. 304.
410.203 Annotation
A bank which received an electronic transfer of funds with incomplete instructions and deposited the funds in an account in which the account owner had granted a security interest to a creditor who had a rightful claim to the transferred funds and which subsequently transferred the funds to another account of the account owner who absconded with the funds was liable to the secured creditor for the amount of the transfer. General Electric Capital Corp. v. Central Bank,
49 F.3d 280 (1995).
410.204
410.204
Refund of payment and duty of customer to report with respect to unauthorized payment order. 410.204(1)(1) If a receiving bank accepts a payment order issued in the name of its customer as sender that is not authorized and not effective as the order of the customer under
s. 410.202, or that is not enforceable, in whole or in part, against the customer under
s. 410.203, the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding 90 days after the date the customer received notification from the bank that the order was accepted or that the customer's account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.
410.204(2)
(2) Reasonable time under
sub. (1) may be fixed by agreement as stated in
s. 401.204 (1), but the obligation of a receiving bank to refund payment as stated in
sub. (1) may not otherwise be varied by agreement.
410.204 History
History: 1991 a. 304.
410.205
410.205
Erroneous payment orders. 410.205(1)(a)(a) The rules in
pars. (am) to
(c) apply if an accepted payment order was transmitted pursuant to a security procedure for the detection of error and any of the following occurs:
410.205(1)(a)1.
1. The payment order erroneously instructed payment to a beneficiary not intended by the sender.
410.205(1)(a)2.
2. The payment order erroneously instructed payment in an amount greater than the amount intended by the sender.
410.205(1)(a)3.
3. The payment order was an erroneously transmitted duplicate of a payment order previously sent by the sender.
410.205(1)(am)
(am) If the sender proves that the sender or a person acting on behalf of the sender pursuant to
s. 410.206 complied with the security procedure and that the error would have been detected if the receiving bank had also complied, the sender is not obliged to pay the order to the extent stated in
pars. (b) and
(c).
410.205(1)(b)
(b) If the funds transfer is completed on the basis of an erroneous payment order described in
par. (a) 1. or
3., the sender is not obliged to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution.
410.205(1)(c)
(c) If the funds transfer is completed on the basis of a payment order described in
par. (a) 2., the sender is not obliged to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution.
