§ 10:4A-201 — Security procedure

§4A-201. Security procedure
"Security procedure" means a procedure established by agreement of a customer and
a receiving bank for the purpose of (i) verifying that a payment order or communication
amending or cancelling a payment order is that of the customer, or (ii) detecting error in the
transmission or the content of the payment order or communication. A security procedure
may impose an obligation on the receiving bank or the customer and may require the use of
algorithms or other codes, identifying words, numbers, symbols, sounds, biometrics,
encryption, callback procedures, or similar security devices. Comparison of a signature on
a payment order or communication with an authorized specimen signature of the customer
or requiring a payment order to be sent from a known email address, IP address, or telephone
number is not by itself a security procedure.

Legislative History

Added by Acts 1990, No. 1079, §4, eff. Sept. 1, 1990; Acts 2024, No. 773, §1.