9-1111d.   Machine readable instruments; unauthorized transactions;liability; definitions.(a) The amount of a depositor's liability for an unauthorized transactionora series of unauthorized transactions by a machine readable instrumentshall not exceed $50, unless the depositor fails to notify the bank withinfour business days after learning of the loss or theft of the machinereadable instrument, then the depositor's liability shall not exceed $300.

      (b)   For purposes of this section:

      (1)   "Unauthorized transaction by a machine readable instrument" means anelectronic fund transfer from adepositor's account initiated by a person other than the depositor withoutactual authority to initiate the transfer and from which the depositor receivesno benefit. The term does not include any electronic fund transfer: (A)Initiated by a person who was furnished with the access device to thedepositor's account by the depositor, unless the depositor has notified thebank involved that transfers by that person are no longer authorized; (B)initiated with fraudulent intent by the depositor or any person acting inconcert with the depositor; or (C) that is initiated by the bank or itsemployees.

      (2)   "To notify the bank" means a depositor takes such steps as arereasonably necessary to provide the bank with the pertinent information,whether or not any particular officer, employee or agent of the financialinstitution does in fact receive the information. Notice may be given to thebank, at the depositor's option, in person, by telephone or in writing. Notice in writing is considered given at the time the depositor deposits thenotice in the mail or delivers the notice for transmission by any other usualmeans to the bank. Notice is also considered given when the bank becomes awareof circumstances that lead to the reasonable belief that an unauthorizedelectronic fund transfer involving the depositor's account has been or may bemade.

      History:   L. 1975, ch. 43, § 2;L. 1987, ch. 55, § 1;L. 1994, ch. 58, § 1; July 1.