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
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