Scenario 2 - Electronic Funds Abuse

Cole Howard held an account with Regions Bank in Atlanta. Julie Wedman, a woman with whom Howard was briefly involved in a romantic relationship, stole his debit card and used it for fourteen months (well beyond the length of their relationship) to make unauthorized purchases in excess of $10,000. When Howard learned what was happening, he closed his account. The bank refused to reimburse him more than $476.56, the amount of unauthorized transactions that occurred within sixty days of the transmittal of the bank statement that revealed the first unauthorized transaction.

• Why does U.C.C. 4-406 apply to this scenario?