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(810 ILCS 5/4-214) (from Ch. 26, par. 4-214)
Sec. 4-214.
Right of charge-back or refund; liability of collecting
bank; return of item.
(a) If a collecting bank has made provisional settlement with its
customer for an item and fails by reason of dishonor, suspension of
payments by a bank, or otherwise to receive settlement for the item which
is or becomes final, the bank may revoke the settlement given by it, charge
back the amount of any credit given for the item to its customer's account,
or obtain refund from its customer, whether or not it is able to return the
item, if by its midnight deadline or within a longer reasonable time after
it learns the facts it returns the item or sends notification of the facts.
If the return or notice is delayed beyond the bank's midnight deadline or
a longer reasonable time after it learns the facts, the bank may revoke the
settlement, charge back the credit, or obtain refund from its customer, but
is liable for any loss resulting from the delay. These rights to revoke,
charge back, and obtain refund terminate if and when a settlement for the
item received by the bank is or becomes final.
(b) A collecting bank returns an item when it is sent or delivered to the
bank's customer or transferor or pursuant to its instructions.
(c) A depositary bank that is also the payor may charge back the amount
of an item to its customer's account or obtain refund in accordance with the
Section governing return of an item received by a payor bank for credit on
its books (Section 4-301).
(d) The right to charge back is not affected by:
(1) previous use of a credit given for the item; or
(2) failure by any bank to exercise ordinary care |
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(e) A failure to charge back or claim refund does not affect other
rights of the bank against the customer or any other party.
(f) If credit is given in dollars as the equivalent of the value of an
item payable in foreign money, the dollar amount of any charge-back or
refund must be calculated on the basis of the bank-offered spot rate for
the foreign money prevailing on the day when the person entitled to the
charge-back or refund learns that it will not receive payment in ordinary
course.
(Source: P.A. 87-582; 87-1135.)
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