32-6-303. Unauthorized transactions — liability. (1) A customer whose account is debited by an electronic funds transfer without the customer’s authorization is not liable for the amount of the transaction, and the amount must be recredited to the customer’s account as provided under 32-6-302 unless:

Terms Used In Montana Code 32-6-303

  • Department: means the department of administration. See Montana Code 32-6-103
  • Discovery: Lawyers' examination, before trial, of facts and documents in possession of the opponents to help the lawyers prepare for trial.
  • Electronic funds transfer: The transfer of money between accounts by consumer electronic systems-such as automated teller machines (ATMs) and electronic payment of bills-rather than by check or cash. (Wire transfers, checks, drafts, and paper instruments do not fall into this category.) Source: OCC
  • Electronic funds transfer: means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account. See Montana Code 32-6-103
  • Financial institution: means a bank chartered under chapter 1 of this title, a bank chartered under the National Banking Acts in Title 12 of the United States Code, a building and loan association chartered under chapter 2 of this title, a savings and loan association chartered under the Home Owners' Loan Act in Title 12 of the United States Code, a credit union chartered under chapter 3 of this title, or a credit union chartered under the Federal Credit Union Act in Title 12 of the United States Code. See Montana Code 32-6-103
  • Merchant: means a natural person, corporation, partnership, or association engaged in buying and selling goods or services, except that a financial institution is not a merchant. See Montana Code 32-6-103
  • Person: means an individual, partnership, corporation, association, or any other business organization. See Montana Code 32-6-103
  • Premises: means those locations where, by applicable law, financial institutions are authorized to maintain a principal place of business and other offices for the conduct of their respective businesses. See Montana Code 32-6-103
  • Unique identification device: means a magnetic encoded plastic card or equivalent device that contains either a number or a dollar balance, or both, that is unique to a customer and that is issued by a financial institution, merchant, or other person. See Montana Code 32-6-103
  • Writing: includes printing. See Montana Code 1-1-203

(a) the financial institution has provided the customer with a unique identification device for initiating electronic funds transfer requests and transactions are made as a result of the theft or loss of that device, in which case the customer is liable for the first $50 of any consequent transactions made prior to the time the financial institution is notified of the loss or theft; or

(b) the financial institution has provided the customer with a unique identification device for initiating, in conjunction with a personal identification number separate from the device, electronic funds transfer requests and the customer attaches the personal identification number to the device by writing or otherwise or in any way makes the number readily available for discovery in connection with the theft or loss of the device and transactions are made as a result of the theft or loss of the device, in which case the customer is liable for one-half the value of all consequent transactions made until the financial institution is notified of the theft or loss.

(2) A customer who willingly gives the customer’s unique identification device and personal identification number to another is presumed to have authorized any electronic funds transfers requested by the other person.

(3) A merchant who makes electronic funds transfer services available on the merchant’s premises is liable for the amount of an unauthorized electronic funds transfer requested from the premises only if the merchant:

(a) or the merchant’s agent is negligent in requiring a user of electronic funds transfer services to furnish adequate self-identification;

(b) fails to retain a physical record of the transaction for 1 year following the transaction; or

(c) breaches the warranty required by subsection (4).

(4) A merchant operating a point-of-sale terminal shall warrant to the financial institution or the department that an order for an electronic funds transfer emanating from the terminal is part of a commercial transaction in which the customer receives goods or services of commensurate value.

(5) The liability for any unauthorized or erroneous electronic funds transfer that does not fall upon a customer or a merchant under this section falls upon the financial institution that carries out the transfer.