A trial was held before this court on December 23, 2011. Based upon the trial testimony and exhibits entered into evidence. This court finds trial judgment in Claimant's favor.

Claimant is suing to recover from defendant bank $3,400.00 due to an unauthorized withdrawal of $3,400.00 that occurred on May 9, 2011. This $3,400.00 unauthorized withdrawal appeared on claimant's May 17, 2011 account statement.

Claimant credibly testified that he was overseas on May 9, 2011 and that the withdrawal took place at a New Jersey Branch of defendant's bank where he has never done any banking at.

Claimant credibly testified that he went abroad on May 8, 2011 and returned home on August 8, 2011 and when he discovered what had happened the defendant refused to refund him the $3,400.00 that was withdrawn without his authorization.

Defendant alleges that according to its rules a banking customer must notify them within 30 (thirty) days of any unauthorized withdrawals. Defendant argues that claimant advised them more than 90 (ninety) days of the unauthorized withdrawal and therefore it is not legally, morally or ethically responsible to make good to claimant on his $3,400.00 loss.

As a side matter, the court notes that when it inquired from the defendant to point out [*2]where in its agreement with the claimant this 30 (thirty) day rule is written their representative stated on the record that he does not have his glasses and it would be way to difficult for him to find the small print for the court. Fortunately, the claimant had a copy of the agreement that he enlarged and brought with him to court. What troubles the court that this 30 (thirty) day reporting rule is contradicted by another clause of the parties agreement that affords the claimant herein 6 (six) months to report an unauthorized transfer. Under this 6 (six) month rule claimant was timely and is entitled for the defendant to make good on the $3,400.00 unauthorized withdrawal. For this reason alone of claimant's timeliness under defendant's agreement (that their corporate department prepared under the supervision of its legal department) claimant prevails in this Small Claims Action.

It is well settled that, "[A] bank has an obligation to refund the principal regardless of [the promptness of the customer's] notice, provided such notice is given within one year in accordance with UCC 4-A-505." (Regatos v North Fork Bank, 5 NY3d, 395, 403 [2005]; see also NY UCC 4-A-505). Moreover, under UCC 4-A-204(2) this one year time frame, "may not...varied by agreement." As a matter of public policy and consumer protection New York State Courts will give no force and effect to any clause in a commercial banking agreement between a bank and its customers that would shorten this one year time frame. Thus Section A-4-204 establishes a bank's basic obligation to make good on unauthorized and ineffective transfers.

Here, public policy condemns the actions of the defendant as being repugnant. By law, the defendant cannot shorten nor vary to the determent the time frame of 1 (one) year when the claimant (or any consumer of its banking establishment) can report an unauthorized withdrawal. Claimant reasonably upon his return from overseas notified the defendant regarding the unauthorized withdrawal. Once notified the defendant had a legal, ethical and moral obligation to make good to claimant the $3,400.00 that was withdrawn from his account without his authorization, together with any bank interest that claimant is due in accordance with the terms of his account with the defendant.

Therefore, trial judgment for $3,400.00 in claimant's favor against the defendant herein.

This constitutes the court's trial decision, order and judgment.

January 4, 2012

__________________

Orlando Marrazzo, Jr.,

Civil Court Judge