Our deposit account agreement reads as follows:

STATEMENTS – You must notify us of an unauthorized signature or alteration within a reasonable time (not to exceed 14 days) after we send or make available to you your statement. If you do not notify us: (1) you cannot assert the unauthorized signature or alteration against us, and (2) you cannot assert any unauthorized signatures or alterations by the same wrongdoer on items paid by us after the reasonable time mentioned above elapses, but before we receive your notice. If you do not notify us of the problem within 30 days of when we send or make available to you the statement you lose any rights to recover from us even if we failed to exercise ordinary care in paying an item with an unauthorized signature or alteration. You must report any other problem (e.g., erroneous statement or passbook entry, missing signature, unauthorized endorsement, etc.) within this 30-day period or lose your right to assert the problem against us.

My take on this language is that customers have 14 days from the date the statement is made available to them to report THE FIRST ITEM with an unauthorized signature, otherwise the bank is not liable for their losses for unathorized signatures by the same wrongdoer.

At the Security Officer Workshop this year (which was great, by the way!), we learned that the UCC gave customers one year to report, however we were only liable for the first statement containing the unauthorized signatures and up to the next 30 days, depending on the FI's deposit account agreement, which I think we have modified to 14 days.

Does a customer (per UCC) have one year to report an unauthorized signature in Wisconsin? Can this be modified by the account agreement?

I am getting different answers from legal and executive management on this and am frustrated. I want to apply the agreement equally and consistently.

Thoughts???

After a meeting with legal counsel and executive management, we have decided to allow customers 90 days from the date the first statement is made available that contains the unauthorized signature or error to report the error(s). In that event, we will have a max responsibility for the first statement plus 14 days. How long does your FI give for customer to report an error? I am thinking industry standard in this area is about 60 days.

We pretty much following what you have noted but only give the customer 60 days plus 14.

Of course, UCC (Fed and WI) allows the customer one year to initiate a claim however modications within reasonable measures are allowed. We used wording provided by Metavante (now FIS) Regulatory Services.

Does that mean you will credit them for 60 days plus 14 worth of unauthorized items or that you give them 60 days plus 14 to notify the bank of the unathorized items?

And thank you for your response!!!

Sorry about the delay Packerman. No, we do not credit them 60 days. They have 60 days to notify us however reimbursement is not 60 days plus 14. It is for all items on the first statement (within the 60 day period) plus 14 days.

For example, assume statements are produced at the end of each month. Fraud took place on 10/23. Customer has until 11/14 to notify us. We will cover all items from 10-23 through 11/14.
We also search back on year to determine if this has happened before (many of which we have denited based on this discovery).

Hope this helps

Yes, thank you very much!!!