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WIRE TRANSFERS Unauthorized Payment Order
Beneficiary Unauthorized Payment Order Originator Since Originators are liable only for authorized payment order, what incentives does Article 4A provide for banks to prevent unauthorized payment orders? Unauthorized Payment Order Agreed security Procedures for Authenticating Payment Orders. 4A-202(b) Unauthorized Payment Order Beneficiary’s Bank Originator’s Bank
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WIRE TRANSFERS Unauthorized Payment Order
Beneficiary Unauthorized Payment Order Originator What defenses, if any does originators have to an originator’s bank’s claim that payment order was authorized because the bank followed agreed security procedures? Unauthorized Payment Order Agreed security Procedures for Is commercially unreasonable Orders. 4A-202(b) Unauthorized Payment Order Beneficiary’s Bank Originator’s Bank
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WIRE TRANSFERS Unauthorized Payment Order
Beneficiary Unauthorized Payment Order Originator Security procedure requires originator to use password, use encrypted payment order and originator’s bank send confirming to designated party before payment order is issued. Copy of faxed to originator by bank. Unauthorized Payment Order Bank must comply with Security procedure. 4A-202(b)(ii) Unauthorized Payment Order Beneficiary’s Bank Originator’s Bank
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WIRE TRANSFERS Unauthorized Payment Order
Beneficiary Unauthorized Payment Order Originator Thief hacks into security system used by originator and its bank to send and receive authorized payment orders. If unauthorized payment order sent, can the originator avoid liability even though bank complied with security procedures? Unauthorized Payment Order Thief not entrusted To act for consumer. 4A-203(a)(2) Unauthorized Payment Order Beneficiary’s Bank Originator’s Bank
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WIRE TRANSFERS Unauthorized Payment Order
Beneficiary Unauthorized Payment Order Originator If fraudulent payment order sent by thief, is originator liable to originator’s bank? Unauthorized Payment Order The consumer is deem the sender Of the order 4A-202(d) & 4A-402(c) Unauthorized Payment Order Beneficiary’s Bank Originator’s Bank
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