Reduce Error Notification for Signatures

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Question:

We allow customers 30 days to examine their statement for errors from when the statement is first made availableto them and 60 days to report any unauthorized signatures, alterations or forgeries. Is the 60 day period mandatory or can we reduce the error notification period to 30 days?

Answer:

60 days is mandatory for electronic transfers in a consumer account (Reg E). For all other types of transactions, the UCC and state law apply. Although it's titled Uniform Commercial Code, it's not always uniform. Individual states have adopted nonuniform provisions that may allow for shorter time frames to review statements. Also, check your deposit contracts what does the language state there? If it says 60 days there, you are contractually bound to that, unless you have provisions allowing you to amend the contract. But in no case can you reduce the timeframe for EFT errors covered by Reg E that always has to be 60 days.

First published on BankersOnline.com 6/04/01