410.107410.107 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.

410.108410.108 Relationship to Electronic Fund Transfer Act.

410.108(1)(1) Except as provided in sub. (2), 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(2)(2) This chapter applies to a funds transfer that is a remittance transfer, as defined in 15 USC 1693o-1, unless the remittance transfer is an electronic fund transfer, as defined in 15 USC 1693a.

410.108(3)(3) In a funds transfer to which this chapter applies, in the event of an inconsistency between an applicable provision of this chapter and an applicable provision of the electronic fund transfer act, the provision of the electronic fund transfer act governs to the extent of the inconsistency.

410.201410.201 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.

410.202410.202 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.

410.203410.203 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.