Security procedure.
1. “Security procedure” means a procedure established by agreement of a customer and a receiving bank to:
(a) Verify that a payment order or communication amending or cancelling a payment order is that of the customer; or
(b) Detect error in the transmission or the content of the payment order or communication.
2. A security procedure may require the use of algorithms or other codes, identifying words or numbers, encryption, callback procedures or similar security devices.
3. Comparison of a signature on a payment order or communication with an authorized specimen signature of the customer is not by itself a security procedure.
Last modified: February 27, 2006