Liberty CAD Check By Fax Information

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Security Issues:

Check By Fax (also know as a Draft Check) has the same security as mailing a check since the information you send us is provided on the check you would normally send.
Faxing a check is actually slightly more secure since your checking account information is coming directly to Liberty CAD. There is no chance for your checking information to be stolen in the mail if mail a payment.
If you bank returns checks with your balance statement you will also have the Liberty CAD draft check returned to you for verification.

Here's What Happens When You Use Check By Fax For Your Liberty CAD Invoice Payment:

You fill out the Liberty CAD Check By Fax Authorization Form.
You make out a check as you normally would and attach it to the place provided on the Check By Fax Authorization Form.
You Fax your Liberty CAD Check By Fax Authorization Form to (307) 635-3667.
Liberty CAD (Liberty CAD does not use an outside service bureau for processing) creates a Draft Check from your checking information (Note: We will use the same check number) which looks like a standard check but instead of the authorizing signature the check contains "This draft authorized by your depositor NO SIGNATURE REQUIRED".
Liberty CAD keeps a record of your authorization for legal reasons.
Liberty CAD deposits the Draft Check and is paid by your bank.

Legal Issues:

Check demand drafts, or "drafting" funds from a second party's checking account, have been a method of payment for more than 8 years. 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 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. 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.
Proper "verification" includes...

• Written authorization received by mail or fax.
• Recording the "authorization" phone call with customers permission (PAUG has elected not to accept phone authorization.
• Sending out written notice to customer prior to depositing paper draft. This notice only needs to be in the mail prior to making deposit.

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Last modified: August 10, 1998