Positive Pay, Payee-Positive Pay and Reverse Positive Pay Services THE SERVICE
Positive Pay, Payee Positive Pay and Reverse Positive Pay services are designed to detect
check fraud.
Positive Pay and Payee Positive Pay
In accordance with the applicable Operational Instructions, prior to placing checks in circulation
that are drawn on the Account(s), the Customer shall provide Bank with a record (“Check Issue
File”) which Bank will match against checks presented. Bank may pay and charge to the
Account(s) each presented check that matches a check identified in any current or previous
Check Issue File. For Positive Pay, the Check Issue File shall contain a check serial number and
exact dollar amount for each check. For Payee Positive Pay, in addition to the check serial
number and exact dollar amount, the Payee name will also be provided on the Check Issue File
for verification. Customer assumes full responsibility for the timely and accurate submission of the
Check Issue File and data to Bank.
Exception Checks (checks presented to Bank that are drawn on the Account(s) and either do not
exactly match, or appear to be a duplicate of, a check included in the Check Issue File for such
Account(s)) are identified and a report describing exception checks (“Exception Report’) is
provided to Customer.
Bank will pay (charge to the Account(s)) or return (to the depository bank) Exception Checks
pursuant to Customer’s instructions (“Pay Request” and “Return Request”) or pursuant to ONLY
ONE of the following default selections regardless of how many Accounts Customer maintains:
Return Default. If Return Default Option is selected, Bank shall return to the depository
bank any Exception Check drawn on the Account(s), unless Customer issues a timely
Pay Request to Bank in the manner prescribed in the applicable Operational Instructions.
Pay Default. If Pay Default option is selected, Bank shall pay and charge to the
Account(s) any Exception Check drawn on the Account(s) unless the Customer issues a
timely Return Request to Bank in the manner prescribed in the applicable Operational
Instructions.
Bank shall not be obligated to comply with any Pay Request or Return Request received after a
deadline, or in a format, medium, or place not designated in the applicable Operational
Instructions, but shall treat such a Pay Request or Return Request as though it had not been
received. Bank will notify Customer of the availability of the Exception Report by e-mail sent to
the address(es) specified for that purpose in the applicable Operational Instructions. If Customer
does not make the necessary Pay Request or Return Request by the deadline specified in the
applicable Operational Instruction (“Deadline”), Bank will use the default option as specified by
Customer. Customer acknowledges that pay or return decisions must be based on the Exception
Report. The failure of Customer to receive the e-mail transmission for any reason does not affect
Customer's responsibility to make the appropriate Pay Request or Return Request by the
Deadline.
Bank may rely upon the contents of each Check Issue File and is not responsible for detecting
any Customer error contained in any Check Issue File, Pay Request or Return Request sent by
Customer to Bank.
Customer agrees that the security procedures set forth herein or otherwise adopted in connection
with the use of this service are commercially reasonable and that any transmission of a Check
Issue File, Pay Request or Return Request using Customer's user identification number and
password is deemed to be authorized by Customer.
Customer will provide Bank with test data (checks, issue file, or other transmission), if applicable,
at least two (2) weeks prior to the implementation of Positive Pay or Payee Positive Pay Service.
For Customers who enroll in Positive Pay, checks presented over-the-counter for cash will be
verified by Bank at the time of presentment, and checks presented over-the-counter for deposit
will be verified by Bank after the close of business on the date of presentment.
For customers who enroll in Payee Positive Pay, checks presented over-the-counter for deposit
will be verified by Bank after the close of business on the date of presentment. The Payee
Positive Pay service is not available for checks presented over-the-counter for cash. Instead, the
Positive Pay verification process (serial number and dollar amount only) will be conducted at the
time of presentment.
In no event shall Bank be liable for: (i) any check paid over-the-counter if, at the time the check
was reviewed by the teller, it did not appear as an Exception Check; (ii) any check not paid overthe-counter because it appeared to be an Exception Check when the check was reviewed by the
teller; or (iii) any check paid over-the-counter on any day for which Customer requested Bank to
remove the Positive Pay or Payee Positive Pay service.
Bank is authorized to pay any check listed in the Check Issue File. Customer may place a VOID
or CANCEL request on a check listed on the Check Issue File for any check not issued or listed in
error, but only if the check remains in Customer’s possession. If a check listed in the Check Issue
File has been lost or stolen or otherwise cannot be accounted for, Customer must place a timely
STOP PAYMENT order on such check. Unless Customer places a timely STOP PAYMENT order
on a lost, stolen or missing check that is listed in the Check Issue File, Bank is not liable for any
such check that is paid from the Account(s).
Except as expressly provided otherwise herein, if Bank pays an Exception Check in accordance
with the Pay Default option selected by Customer or in accordance with a Pay Request issued by
Customer, such payment shall be proper, and Customer waives any right Customer may have to
assert that the Exception Check was not properly payable. If Bank returns an Exception Check in
accordance with the Return default option selected by Customer or in accordance with a Return
Request issued by Customer, the dishonor shall be proper, and Customer waives any right
Customer may have to assert that the return was improper.
Customer agrees that Bank has exercised ordinary care if Bank pays or returns an Exception
Check consistent with the provisions of the Agreement. Bank's liability for wrongful dishonor of an
Exception Check shall be limited to the damages for wrongful dishonor recoverable under U.C.C.
Articles 3 and 4. If an Exception Check is paid improperly, Bank will be liable to Customer for the
lesser of the amount of the improperly paid Exception Check or Customer's actual damages
resulting from such improper payment. Bank retains the right to assert Customer's failure to
exercise reasonable care. Bank retains the right to assert the defense that Customer has
sustained no actual damages because Bank's payment of the Exception Check discharged
Customer’s indebtedness.
Anything to the contrary herein notwithstanding, Bank shall have no liability to Customer for
wrongful dishonor when Bank, acting in good faith, returns an Exception Check if: (a) Bank
reasonably believed the Exception Check was not properly payable; (b) there are insufficient
Available Funds on deposit in the Account(s); or (c) Bank is required to do so by the service of
legal process on Bank or the instructions of regulatory or government authorities or courts.
Reverse Positive Pay
Bank will send Customer a daily check presentment report file (“Presentment Report”). It is
Customer’s responsibility to review the Presentment Report and communicate to Bank, in a
manner acceptable to Bank, its decision on whether to “Pay” or “Do Not Pay and Return” such
checks. If Customer fails to communicate its decision prior to the deadline specified in the
applicable Operational Instruction (“Deadline”),, the checks in the Presentment Report will be
automatically paid.
Bank is not responsible for detecting any Customer error contained in any “Pay” request or “Do
Not Pay and Return” request sent by Customer to Bank.
Customer agrees that the security procedures set forth herein or otherwise adopted in connection
with the use of this service are commercially reasonable and that any transmission of a “Pay”
request or “Do Not Pay and Return” request using Customer's user identification number and
password is deemed to be authorized by Customer.
For Customers who enroll in Reverse Positive Pay, checks presented over-the-counter for
deposit will be provided for Customer’s review on the following business day. The Reverse
Positive Pay service is not available for checks presented over-the-counter for cash. The only
way to ensure that such check is not paid by Bank is for Customer to place a timely STOP
PAYMENT order; otherwise, such checks may be cashed if Bank’s standard protocols are met.
Miscellaneous
Customer agrees to provide Bank ten (10) voided sample checks from each Account for purposes
of verifying accuracy, validity, and quality of the MICR (Magnetic Ink Character Recognition),
and/or payee name fields on checks, and paper quality. Service will commence upon acceptance
of sample checks and notification by Bank that all implementation steps are complete.
Bank is not required to maintain signature cards for any Account and, regardless of whether Bank
maintains signature cards, in no event shall Bank be obligated to inspect any check for the
presence or authenticity of any signature, or determine whether or not the signature is authorized.
If Customer suffers a loss under this Agreement, Bank assigns to Customer any claim that Bank
has against a depository or collecting bank to recover the loss, including any claim for breach of
warranty under the applicable provisions of Article 4 of the U.C.C.