Skip to content

Time Frame for Checking Statements

Answered by: 

Question: 
We have printed on the back of our statements "please examine immediately and report if incorrect. If no reply is received within 14 days, the account will be considered correct." My question is, can we do that? I know there are different time frames depending on the type of transaction, but this time frame seems shortened. What are the compliance issues with this statement? Should it be changed? We send out full Reg E disclosures yearly.
Answer: 

Although your statement blurb provides your bank some minimal "cover" from customers who take their own sweet time to identify problems, you should start your work in your deposit contract. The underpinning of the customer's obligation to examine statements is in the UCC, section 4-406, but that section only addresses unauthorized signatures on items (other than EFTs under Reg E) and alterations. That section is very liberal. Except in "same wrongdoer" cases, it can give the customer up to a year to enter a claim.

Many banks attempt to limit that inspection period by defining a shorter period in their deposit contracts. Some also attempt to pull in other forms of error, like encoding errors, deposit errors, etc., and include notices reminding customers of their contractual duty to examine statements on their statement stock. I'd suggest you engage an attorney with state specific UCC experience that includes any court decisions dealing with banks' attempts to limit their liability in this way, if your bank is serious about a review of its position on customer adjustment rights.

First published on BankersOnline.com 9/10/07

First published on 09/10/2007

Filed under: 
Filed under compliance as: 
Filed under operations as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics