The legal basis for e-mail or fax checks

Fax, E-Mail, and Telephone checks (pre-authorized paper bank drafts) are completely 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.

The primary requirement is that the checking account holder (you) must give verbal or written pre-authorization , such as faxing us your check. Or E-mailing us your banking information.

Once we have received pre-authorization, we 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. Similar laws have been passed recently in Canada.

Arizona Restaurant Marketing & Services Company
Established 1982

Phone: 602 840-4223 4026 N. 45th Place e-mail
Fax: 602 840-3054 Phoenix, AZ 85018 armsco@armsco.com