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    Check and Fund Transfers

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    Support your responses with appropriate cases, laws, and other relevant examples. Cite any references.

    Brittany currently attends college and runs her new business, Pampered Pets, a sole proprietorship she created in her sophomore year. Since Brittany is a student, she does not have much capital and seeks to save money where she can; therefore, she only uses one bank account for her personal and professional funds. Brittany frequently monitors her account using the online portal furnished by her bank. On Friday night, Brittany noticed that $724.43 had been withdrawn from her account on two separate occasions that day. Brittany knows that she did not spend that amount of money one time, much less two times in one day. She is afraid that someone has accessed her account. Assume that the following Monday is a holiday and banks will be closed; however, one branch will be open for four hours on Saturday. On Saturday morning, Brittany discovers two checks have cleared the bank. She is able to view copies and see that the checks were written using another party's name and address, yet the bank account number belongs to her. One check was written for $94.23 and the other for $950.

    Will Brittany be liable for the moneys withdrawn from her account? Explain why or why not. If she is liable, provide an explanation of the amount.

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    Solution Preview

    It will be challenging to prove the checks are illegitimate. Please read the following: http://perimetergrid.com/wp/2008/01/01/checks-the-most-dangerous-transaction/

    With checks, the money is already gone. If you report a check as fraudulent, there is no federal law saying the bank is liable - it;s up to the bank's own policies and in some cases a hodgepodge of state laws whether they have to help you at all. The bank may get back to you in 60 to 90 days (during which you don't have the money, even if it was the entire contents of your checking account.) You have to report the fraud on a paper letter, with a notarized signature, usually by certified mail. What's more, you have to prove that the checks were not authorized - the burden of proof is on you, not the bank or merchant - and you have to do it to each party from which you're trying to ...