1. If an accepted payment order was transmitted pursuant toa security procedure for the detection of error and the payment order (i)erroneously instructed payment to a beneficiary not intended by the sender, (ii)erroneously instructed payment in an amount greater than the amount intended by the sender, or (iii) was an erroneously transmitted duplicate of a payment order previously sent by the sender, the following rules apply: a. Ifthe sender proves that the sender or a person acting on behalf ofthe sender pursuant tosection 554.12206 complied with thesecurityprocedure and that the errorwould have been detected ifthe receiving bank had also complied, the sender isnot obligated to pay the order to the extent stated in subsections 2 and 3. b. If the funds transfer iscompleted on the basis of an erroneous payment order described in (i)or (iii) of subsection 1, the sender is not obligated to pay the order and the receiving bank is entitled to recover from the beneficiary any amount paid to the beneficiary to the extent allowed by the law governing mistake and restitution. c. If the funds transfer is completed on the basis of a payment order described in (ii)of subsection 1, the sender isnot obligated to pay the order to the extent the amount received by the beneficiary is greater than the amount intended by the sender. In that case, the receiving bank is entitled to recover from the beneficiary the excess amount received to the extent allowed by the law governing mistake and restitution. 2. If the sender of an erroneous payment order described in subsection 1 isnot obligated to pay allor part of the order, and the sender receives notification from the receiving bank that the order was accepted by the bank or that the sender’s account was debited with respect to the order, the sender has a duty to exercise ordinary care, on the basis of information available to the sender, to discover the error with respect to the order and to advise the bank of the relevant facts within a reasonable time, not exceeding ninety days, after the bank’s notification was received by the sender. Ifthe bank proves that the sender failed to perform this duty, the sender is liable to the bank for the loss the bank proves itincurred as a result of the failure, not to exceed the amount of the sender’s order. 3. This section applies to amendments to payment orders in the same manner itapplies to payment orders.
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