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Encoding & Retention Warranties

Question: 
We have a commercial customer whose check was encoded for $300.00 and should have been $3,000.00. This was an inbound item, so the encoding error took place by the BOFD. We were not made aware of the error until a year and 4 months after this item was deposited. At that time we felt the item was too old, and did not send through an adjustment. An additional year has passed, and this item is still being pursued. Can you advise if there is a statute of limitations on filing for an encoding error?
Answer: 

I would say this would be covered by UCC Article 4's general statute of limitations provision which appears in Section 4-411. It states "An action to enforce an obligation, duty, or right arising under this Article must be commenced within three years after the [cause of action] accrues."

First published on BankersOnline.com 5/06/02

First published on 05/06/2002

Filed under: 
Operations
Filed under operations as: 
Encoding
IT
UCC

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