{"data":{"id":"us-ky/krs-355.4-214","jurisdiction":"us-ky","citation":"KRS 355.4-214","heading":"Right of charge -back or refund -- Liability of collecting bank -- Return","body":"of item.\n(1) If a collecting bank has made provisional settlement with its customer for an item\nand fails by reason of dishonor, suspension of payments by a bank, or otherwise to\nreceive settlement for the item which is or becomes final, the bank may revoke the\nsettlement given by it, charge back the amount of any credit given for the item to its\ncustomer's account, or obtain refund from its customer, whether or not it is able t o\nreturn the item, if by its midnight deadline or within a longer reasonable time after it\nlearns the facts it returns the item or sends notification of the facts. If the return or\nnotice is delayed beyond the bank's midnight deadline or a longer reasonabl e time\nafter it learns the facts, the bank may revoke the settlement, charge back the credit,\nor obtain refund from its customer, but it is liable for any loss resulting from the\ndelay. These rights to revoke, charge back, and obtain refund terminate if an d when\na settlement for the item received by the bank is or becomes final.\n(2) A collecting bank returns an item when it is sent or delivered to the bank's customer\nor transferor or pursuant to its instructions.\n(3) A depositary bank that is also the payor  may charge back the amount of an item to\nits customer's account or obtain refund in accordance with the section governing\nreturn of an item received by a payor bank for credit on its books (KRS 355.4-301).\n(4) The right to charge back is not affected by:\n(a) Previous use of the credit given for the item; or\n(b) Failure by any bank to exercise ordinary care with respect to the item, but a\nbank so failing remains liable.\n(5) A failure to charge back or claim refund does not affect other rights of the bank\nagainst the customer or any other party.\n(6) If credit is given in dollars as the equivalent of the value of an item payable in\nforeign money, the dollar amount of any charge -back or refund must be calculated\non the basis of the bank -offered spot rate for th e foreign money prevailing on the\nday when the person entitled to the charge -back or refund learns that it will not\nreceive payment in ordinary course.","path":[],"source_url":"https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=33538","current_through":"Includes enactments through the 2026 Regular Session","vintage":"09/05/2026","retrieved_at":"2026-09-05T20:58:45Z","sha256":"8f8ae6d789d0ca136ee31d0cb4d7cbae4fb5b1e29348e88d947261b7be2a421d","source_id":"us-ky","stale":false,"prev":"us-ky/krs-355.4-213","next":"us-ky/krs-355.4-215"},"notice":"GroundRules: Original legal text. Not legal advice."}