KRS 355.4A-203: Unenforceability of certain verified payment orders.

(1) If an accepted payment order is not, under KRS 355.4A-202(1), an authorized order

of a customer identified as sender, but is effective as an order of the customer

pursuant to KRS 355.4A-202(2), the following rules apply:

(a) By express agreement, evidenced by a record, the receiving bank may limit

the extent to which it is entitled to enforce or retain payment of the payment

order; and

(b) The receiving bank is not entitled to enforce or retain payment of the payment

order if the customer proves that the order was not caused, directly or

indirectly, by a person:

1. Entrusted at any time with duties to act for the customer with respect to

payment orders or the security procedure; or

2. Who obtained access to transmitting facilities of the customer or who

obtained, from a source controlled by the customer and without

authority of the receiving bank, information facilitating breach of the

security procedure, regardless of how the inf ormation was obtained or

whether the customer was at fault. Information includes any access

device, computer software, or the like.

(2) This section applies to amendments of payment orders to the same extent it applies

to payment orders.