Zaman and Civil Liability for Authenticated and Unauthorized Electronic Funds Transfer

An authenticated and unauthorized funds transfer is one of the most important risks in electronic banking.
When an authenticated and unauthorized payment instruction is issued and the bank has no knowledge of the instruction being unauthorized, if that payment instruction has been recognized and confirmed in accordance with security procedures agreed upon with customer, the bank considers the instruction to be authentic and transfer the funds. Under such circumstances, does the bank or another person bear the civil liability and Zaman?
Depending on the payment method used for issuance of the payment instruction and whether the issuance of such instruction was due to the customer's fault or the bank's or neither, Zaman and liability for damages lies with the bank or the customer or both.
This article reviews the concepts of authenticated and unauthorized payments, various categories of payment instructions based on authorization and authenticity, the legal basis of civil liability and consequences of breach of duty under the Iranian law and the U.C.C. The authors believe in the case of authenticated and unauthorized payments, in principle when the customer has proven the unauthorized characteristic of the transfer, the bank shall bear the risk, unless it proves the customer’s fault.