Susan Williams opened a checking account at the First National Bank. She made an initial deposit of $1,800, signed a signature card that indicated to the bank that she was the authorized signator on the account, and was given a supply of blank checks. She also received an ATM card that, when used along with an assigned PIN (personal identification number), allowed her to make deposits to her account as well as to obtain cash from it. Each month the bank sent her a statement reflecting the activity in the account during the previous month along with the canceled checks. Several months after she opened the account, the bank erroneously refused to pay a check she had written to a clothing store even though she had sufficient funds in her account. As a result, the store filed a complaint with the local prosecutor indicating she had written a "bad check." On one occasion, Susan called the bank to stop payment on a check she had written to cover repairs to her automobile because while driving the car home, she discovered the requested repair had not been made. However, the bank paid the check later that day despite the stop-payment order she had given the bank. Another time, Susan's wallet fell out of her purse while she was shopping at a mall. She received a call the next morning indicating the wallet had been found and she retrieved it at that time. However, when she received her next monthly statement from the bank, she discovered that someone had apparently used her ATM card to withdraw $200 from her account on the day her wallet had been lost. Susan's experience raises a number of legal issues that will be covered in this chapter, including:
What rights does Susan have against the bank for refusing to pay the check to the clothing store despite the fact she had sufficient funds on deposit to cover it?
What rights does Susan have against the bank for failing to honor the stop-payment order she placed on the check she had written to the repair shop?
What rights does Susan have against the bank because of the unauthorized use of her ATM card? What must she do to preserve those rights?
If a repair shop refuses to release your automobile unless you pay it more than the repair shop had advised you they would charge you for the work, would it be ethical to give the repair shop a check for the larger amount knowing you intend to immediately go to your bank and stop payment on it?
