Tex. Bus. & Com. Code Section 4A.204
Refund of Payment and Duty of Customer to Report with Respect to Unauthorized Payment Order

(a)

If a receiving bank accepts a payment order issued in the name of its customer as sender which is (i) not authorized and not effective as the order of the customer under Section 4A.202 (Authorized and Verified Payment Orders), or (ii) not enforceable, in whole or in part, against the customer under Section 4A.203 (Unenforceability of Certain Verified Payment Orders), the bank shall refund any payment of the payment order received from the customer to the extent the bank is not entitled to enforce payment and shall pay interest on the refundable amount calculated from the date the bank received payment to the date of the refund. However, the customer is not entitled to interest from the bank on the amount to be refunded if the customer fails to exercise ordinary care to determine that the order was not authorized by the customer and to notify the bank of the relevant facts within a reasonable time not exceeding 90 days after the date the customer received notification from the bank that the order was accepted or that the customer’s account was debited with respect to the order. The bank is not entitled to any recovery from the customer on account of a failure by the customer to give notification as stated in this section.

(b)

Reasonable time under Subsection (a) may be fixed by agreement as stated in Section 1.302 (Variation by Agreement)(b), but the obligation of a receiving bank to refund payment as stated in Subsection (a) may not otherwise be varied by agreement.
Added by Acts 1993, 73rd Leg., ch. 570, Sec. 7, eff. Sept. 1, 1993. Amended by Acts 2003, 78th Leg., ch. 542, Sec. 15, eff. Sept. 1, 2003.

Source: Section 4A.204 — Refund of Payment and Duty of Customer to Report with Respect to Unauthorized Payment Order, https://statutes.­capitol.­texas.­gov/Docs/BC/htm/BC.­4A.­htm#4A.­204 (accessed Apr. 13, 2024).

4A.101
Short Title 4A.102
Subject Matter 4A.103
Payment Order--definitions 4A.104
Funds Transfer--definitions 4A.105
Other Definitions 4A.106
Time Payment Order Is Received 4A.107
Federal Reserve Regulations and Operating Circulars 4A.108
Relationship to Electronic Fund Transfer Act 4A.201
Security Procedure 4A.202
Authorized and Verified Payment Orders 4A.203
Unenforceability of Certain Verified Payment Orders 4A.204
Refund of Payment and Duty of Customer to Report with Respect to Unauthorized Payment Order 4A.205
Erroneous Payment Orders 4A.206
Transmission of Payment Order Through Funds Transfer or Other Communication System 4A.207
Misdescription of Beneficiary 4A.208
Misdescription of Intermediary Bank or Beneficiary’s Bank 4A.209
Acceptance of Payment Order 4A.210
Rejection of Payment Order 4A.211
Cancellation and Amendment of Payment Order 4A.212
Liability and Duty of Receiving Bank Regarding Unaccepted Payment Order 4A.301
Execution and Execution Date 4A.302
Obligations of Receiving Bank in Execution of Payment Order 4A.303
Erroneous Execution of Payment Order 4A.304
Duty of Sender to Report Erroneously Executed Payment Order 4A.305
Liability for Late or Improper Execution or Failure to Execute Payment Order 4A.401
Payment Date 4A.402
Obligation of Sender to Pay Receiving Bank 4A.403
Payment by Sender to Receiving Bank 4A.404
Obligation of Beneficiary’s Bank to Pay and Give Notice to Beneficiary 4A.405
Payment by Beneficiary’s Bank to Beneficiary 4A.406
Payment by Originator to Beneficiary 4A.501
Variation by Agreement and Effect of Funds Transfer System Rule 4A.502
Creditor Process Served on Receiving Bank 4A.503
Injunction or Restraining Order with Respect to Funds Transfer 4A.504
Order in Which Items and Payment Orders May Be Charged to Account 4A.505
Preclusion of Objection to Debit of Customer’s Account 4A.506
Rate of Interest 4A.507
Choice of Law
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Accessed:
Apr. 13, 2024

§ 4A.204’s source at texas​.gov