Clark_11e-AM-Ch27.doc - CHAPTER 27 CHECKS AND BANKING IN...

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213 C HAPTER 27 C HECKS AND B ANKING IN THE D IGITAL A GE A NSWER TO C RITICAL A NALYSIS Q UESTIONS IN THE F EATURE E MERGING T RENDS —F OR C RITICAL A NALYSIS Q UESTION 1 (P AGE 565) Should only banks and regulated financial institutions be allowed to issue ATM cards? Why or why not? Yes, because limiting the issuers of ATM cards to regulated financial institutions reduces the number of methods by which terrorists and other criminals can anonymously transfer money or launder illegally obtained funds. No, the financial-reporting provisions should be extended to currently unregulated entities, because doing otherwise would only offer an opportunity to develop other methods for criminals and terrorists to conceal their activities. E MERGING T RENDS —F OR C RITICAL A NALYSIS Q UESTION 2 (P AGE 565) How else might the government regulate digital funds to reduce the potential for cyberlaundering? Laws could be passed to cover the current and future owners and operators of financial exchanges of all types. A NSWERS TO Q UESTIONS AT THE E NDS OF THE C ASES C ASE 27.1—(P AGE 551) W HAT I F THE F ACTS W ERE D IFFERENT ? If the bank had shown that Robert had failed to take reasonable care in control- ling access to the blank checks for his account, would the outcome in this case have been different? Why or why not? Yes. It was the bank’s failure to prove its case that caused the decision against the bank. If the bank had shown that Robert had not exer- cised ordinary care, or that his negligence had substantially contributed to the forgery, the bank likely would not have been obliged to recredit Robert’s account. T HE E-C OMMERCE D IMENSION Would the result in this case have been different if the bank had made Robert’s canceled checks available for review only online ? Explain. Probably not, because the method by which the bank made customers’ canceled checks available for their review was not a factor in the court’s determination of the bank’s liability in this case. The issue was whether the bank showed that its account holder failed to exercise ordinary care to prevent the forgery of a check.
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214 UNIT FIVE: NEGOTIABLE INSTRUMENTS C ASE 27.2—(P AGE 558) T HE E THICAL D IMENSION Does a bank have a duty to protect its customers from their own naiveté, as exemplified in this case by Dunn’s trusting someone he did not know with his bank account information? Why or why not? Dunn asserted that the damages he sustained were caused by Bank One's negligence because the bank gave him credit too quickly for the counterfeit check. “In essence, his argument is that Bank One should have protected him from himself. Under the circumstances of this case, Bank One owed Dunn no such duty.” Dunn testified that he was aware of such fraud schemes as the one perpetrated in this case. “Dunn's suspicions should have been raised when his $500,000 lobbying fee was suddenly
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Clark_11e-AM-Ch27.doc - CHAPTER 27 CHECKS AND BANKING IN...

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