§ 4A-201. Security procedure

Latest version.

   (a) "Security procedure" means a procedure established by agreement of a customer and a receiving bank for the purpose of:

   (1) Verifying that a payment order or communication amending or cancelling a payment order is that of the customer; or

   (2) Detecting error in the transmission or the content of the payment order or communication.

(b) A "security procedure" may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures, or similar security devices.

(c) Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a "security procedure".

HISTORY: 1991, ch. 548.

                    
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