Beginning July 1, 2006, a bank that transfers or presents a remotely created check for consideration warrants to the transferee bank, any subsequent collecting bank, and the paying bank, that the person on whose account the check was drawn authorized the check in the amount stated on the check and to the payee stated on the check.
This amendment preempts the UCC with regard to remotely created checks. However, the Federal Reserve has amended Regulation CC regarding bank liability for unauthorized remotely created checks.
#Reg cc check endoresment code
In North Carolina, as in most states, the Uniform Commercial Code (“UCC”) requires a bank to recredit its customer’s account for the amount of any unauthorized check the bank pays, including any unauthorized remotely created check. Who is liable for unauthorized remotely created checks? However, remotely created checks are vulnerable to fraud because they do not bear the drawer’s signature or other readily verifiable indication of authorization. Similarly, a customer can authorize a credit card company to create a remotely authorized check by telephone, which may allow the customer to avoid late charges by paying his credit card bill in a timely manner. For instance, a person without a credit or debit card can purchase an item from a telemarketer by authorizing the seller to create a remotely created check.
Remotely created checks can be useful payment devices. Instead of a signature, the check often bears a statement that the customer authorized the check or bears the customer’s printed or typed name. Remotely created checks, also known as “telechecks,” are typically created when the holder of a checking account authorizes a payee (often a telemarketer or a credit card company) to draw a check on that account-but does not actually sign the check.
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