Accepting a Check by Fax, Phone or Email


What you need to know about accepting Checks by Fax, Phone and Email, or on a Web site order form.

When you take a check by Fax, Phone, or email you need to create a new check with the customers exact check number and the authorizing signature must state This draft authorized by your depositor NO SIGNATURE REQUIRED.

This check is known as a Draft Check. You must have verbal or written authorization from your customer. The authorization should be print on the check, but not required to be print on the check.

Legal Issues

Draft Checks, or "drafting" funds from a second party's checking account, have been a method of payment since 1996. Fax, E-Mail, and 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 do not need a signature on thedraft, just as you don't need a signature on a phoned or internet 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 . 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.

  • Written authorization received by mail or fax .
  • Recording the authorization phone call with customers permission.
  • Sending out written notice to customer prior to depositing paper draft. This notice only needs to be in the mail prior to making deposit.

If you are accepting check by email or web form you should call the customer to verify his authoizration.


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