Section 58: Customer’s duty to report unauthorised signature or alteration

58. Customer’s duty to report unauthorised signature or alteration (1) Where a bank sends or makes available a statement of account or cheque pursuant to section 57, the customer shall exercise reasonable promptness in examining the statement or the cheque to determine whether any payment was not authorised because of an alteration of a cheque or because a purported signature by or on behalf of the customer was not authorised. continued on page B3 – 43 B3 – 42 (1) [Issue 7] Revised Laws of Mauritius (2) Where, based on the statement or cheque provided, the customer ought to have reasonably discovered the unauthorised payment, the customer shall promptly notify the bank of the relevant facts. (3) Where the bank proves that the customer failed, with respect to a cheque, to comply with the duties imposed on the customer by subsections (1) and (2), the customer shall be precluded from asserting against the bank— (a) the unauthorised signature or the alteration on the cheque, where the bank also proves that it suffered a loss by reason of the failure; and (b) the unauthorised signature or the alteration by the same wrongdoer on any other cheque paid in good faith by the bank where the payment was made before the bank received notice from the customer of the unauthorised signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding 30 days, in which to examine the cheque or statement of account and notify the bank. (4) Where subsection (3) applies and the customer proves that the bank failed to exercise ordinary care in paying the cheque and that the failure substantially contributed to loss, the loss shall be allocated between the customer precluded and the bank asserting the preclusion according to the extent to which the failure of the customer to comply with subsections (1) and (2) and the failure of the bank to exercise ordinary care contributed to the loss. (5) Where the customer proves that the bank did not pay the cheque in good faith, the preclusion under subsection (3) shall not apply. (6) Without regard to care or lack of care of either the customer or the bank, a customer who does not within one year after the statement or cheques are made available to the customer, pursuant to section 57, discover and report any unauthorised signature on or any alteration on the cheque shall be precluded from asserting against the bank the unauthorised signature or alteration. (7) Every bank shall notify its customers of their duties under subsections (1) and (2) and a notice to that effect shall be printed on the face of each bank statement of the customer. (8) Notification under subsection (7) shall, in the case of existing customers, be made within 60 days of the commencement of this Act and in the case of new customers, at the time the account is opened.