Stacia's assistant, Trevor, picked up coffee and a bagel for Stacia on the way to work. Stacia promised to reimburse him, but when Trevor arrived with the breakfast, Stacia found that she didn't have any cash. She laughingly wrote a check to Trevor, payable to the order of Trevor Banks. On the amount line, she simply wrote "Five." Later, when Stacia was out for lunch, Trevor used her pen and wrote the word "hundred" in the blank space after the word "Five." Trevor cashed the check, and $500 came out of Stacia's bank account. Stacia argued that the bank was liable for the forgery because the word "hundred" was not in her handwriting and that she should be credited the $500. Is she correct?

a. Yes, because the liability for forgery always lies with the bank that pays the forged check.

b. Only if she reports the forgery within eighteen months of its discovery

c. Yes, because the bank should have checked the writing on the amount line against Stacia's signature card that it has on file.

d. No, because Stacia's negligence in writing the check contributed to the forgery.

Robert Porter tried to withdraw $100 from his Citibank checking account at an automated teller machine. When no money was dispensed from the machine after Porter had pushed the necessary buttons, he reported the incident to a bank official. A few weeks later, Porter tried to withdraw $200. When no money appeared after two tries, he again reported the problem to a bank official. As a result of these two incidents, Porter's next bank statement showed one withdrawal of $100 and two of $200 each. Porter filed a lawsuit against the bank to recover the $500 debit on his checking account for cash he never received. At the trial, bank employees testified that the cash machines were out of balance once or twice a week on average. In addition, they testified, at times a subsequent machine user received cash that properly belonged to the prior user of a machine. Also, at the trial, Porter was found to be a credible witness. The court most likely held that Porter could:

a. not recover $500 from Citibank, because there was no way to prove that he did not receive the cash.

b. recover $500 from Citibank, because he notified the bank of the error immediately so that it had an opportunity to make the correction.

c. not recover $500 from Citibank, because there was no evidence of a machine malfunction.

d. recover $500 from Citibank, because under the Electronic Fund Transfer Act (EFTA), banks are liable for up to that amount if an ATM malfunctions.

Lawrence Kruser and his wife maintained a joint checking account with Bank of America on which they were issued ATM cards. The Krusers believed that Mr. Kruser's ATM card was destroyed in September, but their December account statement showed a $20 withdrawal from their account by someone using Mr. Kruser's card. Mrs. Kruser did not examine the December bank statement promptly because at that same time she underwent surgery that required months of recuperation. Indeed, she did not discover the unauthorized withdrawal until the following August, although upon finding it she immediately reported it to the bank. In September, the Krusers received bank statements for July and August which showed forty-seven unauthorized withdrawals that totaled $9,020 made by someone using Mr. Kruser's ATM card. The Krusers notified the bank within a few days of receiving the statements, but the bank refused to reimburse them for the withdrawals. The Krusers filed a lawsuit in a California state court against the bank. The bank claimed that it was not liable for charges made on a card that it would have canceled had it known of the first unauthorized withdrawal. The court most likely held that the bank was:

a. relieved of liability, because under the Electronic Fund Transfer Act (EFTA), banks are not liable for unauthorized ATM withdrawals.

b. not relieved of liability, because the Krusers were excused from notifying the bank due to Mrs. Kruser's illness.

c. relieved of liability, because the Krusers failed to sufficiently notify the bank of the original unauthorized withdrawal.

d. not relieved of liability, because the Krusers notified the bank within one year of learning of the unauthorized use of their card.