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Legal Questions and Functions About
Accepting and Using Checks By Fax, Phone or Online. This is not to be construed as legal advice. Consult your attorney
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- Is taking checks by fax legal?
- What else do I need?
- Can I use a bubble jet printer?
- The MICR fonts aren't working, how
come?
- What do banks think?
- Can companies out side of the U.S.
use this program?
- What if my customer has concerns
about giving out their check information?
1. Is taking checks by fax legal?
Check
demand drafts, or "drafting" funds from a
second party's checking account, have been a method of
payment for more than 8 years, usually in collections.
Telephone checks (pre-authorized paper bank drafts) are
completely legal. The primary requirement is that the
checking account holder (your customer) must give you
verbal or written pre-authorization, such as faxing you
their check. Once you've received pre-authorization, you
really don't even need a signature on the paper-draft,
just as you don't need a signature on a phoned in credit
card order. Paper drafts are explicitly established as a
legal method for payment as provided in: Uniform
Commercial Code, Title 1, Section 1-201 [39] and Title 3,
Sections 3-104, 3-403, 2-403 Code of Federal Regulations,
Title 12 Chapter II, Part 210 Regulation J, Federal
Reserve Bank, Part 2, Sections 4a-201 to 4a-212 Also see
Romani v. Harris, 255 Md. 389. The Federal Trade
Commission in late 1995 proposed rules that became law in
January 1996 (Regulation 16CFR Part 310) that requires
businesses who take checks over the phone to have a
"verification" procedure in place. This could
include receiving written authorization by mail or fax,
recording the "authorization" phone call with
customers permission, and/or sending out written notice
to customer prior to depositing paper draft. This notice
only needs to be in the mail prior to making deposit.
This is legal in Canada Also! The same procedures must
be met as in the United States. The
3 part check paper you use with Checkmatic provides this
important notice that fits into a standard #9 or #10
window envelope. Or you can just include it with the
product you ship provided you don't deposit the paper
draft prior to actual shipping. Both you and your
customer are now protected by requiring ALL users of such
a payment system to have a "verification of
authorization" procedure. WE WILL ASSIST ALL LAW ENFORCEMENT FOR THE ILLEGAL USE
OF OUR SOFTWARE
2. What
else do I need to accept and print checks by fax?
All you need
in addition to our software is blank check paper (Safety
Paper). For most laser printers, no special toner is
required. The magnetic content of the toner in most laser
printers is sufficient. (In rare cases, a special MICR
toner is required.) This is available from your toner
supplier.
Check Suppliers:
- Checks specifically designed to work with Checkmatic ©1999-2009.
We have the best prices anywhere. Check stock pricing is for Checkmatic users only. Prices are on our order page.
- For magnetic toner call the Toner Store at :
1-800-555-3150 or check out their web site
at: The Toner Store
3. Can
I use a bubble jet printer?
Many users
use Bubble Jet Printers or Ink Jet Printers to print
check by fax with no problems. Most banks have gone to
optical scanning which requires no special toner. Our
company uses a HP LaserJet 4 Plus with magnetic toner and our business
banking is done with a major bank. We have never had
any problems processing the drafts created with this
software because we do use magnetic toner.
There are many areas that are still using
magnetic scanning, and this is where the problem lies.
The best thing to do is use magnetic toner and you should not have any problems
4. The MICR fonts aren't working, how
come?
If you
experience problems with your MICR Fonts:
Missing Fonts or when printing checks the letter C an A
are printed instead of the MICR Font:
1. If you are using a laser printer be sure your
configuration is set to print True Type Fonts Graphically.
2. Re-install fonts: Verify that you have three MICR
fonts located in C:\windows\fonts. If the files are
present; copy fonts to a different directory then delete
files located in C:\windows\fonts. Next click-on settings/then:
control panel/then: fonts/ then: file/ select install new
fonts(select directory were you copied MICR fonts)/then:
select install all (3 MICR Fonts.) You can also go to e-action.net for instructions
or view a video.
5. What
do banks think?
Since paper
drafts are perfectly legal your bank must accept your
deposit. The only problem that may arise is if you are
not using the magnetic toner with a laser printer. The
best way to find out is print out a check to yourself on
the proper security check paper needed and deposit it.
Sit back and watch it go through!
6. Can companies out side of the U.S.
use this program?
At the
present time most countries do not have banking
guidelines in place for the processing of bank drafts. We
recommend using this program for processing checks for
banks in the USA its possessions and Canada only.
We have heard of other countries with banking regulations in
place to use Checkmatic but we make no guarantees as to it!
7.What if my customer has concerns
about giving out their check information?
Explain that
you would have the same information if they mailed you a
check. Taking checks by fax is really no different than
accepting a credit card over the phone. No signature is
required for a phone in credit card order. The customer
knows he will only be charged for what he has ordered or
the business that takes the order would be breaking the
law. The same theory applies to bank drafts. The business
can only legally create a draft for the amount that has
been authorized by the customer. As more and more people
find out about checks by fax, phone or online order and
use it the more it will be accepted. Once the public gets
over the uniqueness of the product, they will find it
really makes a whole lot of sense.
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