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presents
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Is all this really legal?
- Absolutely!! 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.
Once you've received pre-authorization, you really don't even need a
signature on the paper-draft (Signature #2). But you as Authorized Agent
for the account holder can sign the paper-draft (Default Signature #1)
if you prefer. We like this approach best because it might save you time
explaining paper-drafts to the local bank clerk when you deposit them.
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
[FAQ Index]
- So
is that really all there is for legal requirements?
- Not exactly. 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. The top portion or check stub printed by TurboDraft
software 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.
We look favorably on this new regulation because it will serve to boost
the check by phone industry. Both you and your customer are now
protected by requiring ALL users of such a payment system to have a
"verification of authorization" procedure.
[FAQ Index]
- Are
you sure my bank will accept these paper bank drafts?
- Bank drafts printed using TurboDraft meet all Federal Reserve and
ABA rules and regulations, providing you have taken the effort to assure
proper MICR Font Alignment. And if you use the default signature format
and sign the paper drafts yourself as Authorized Agent of account holder,
you will probably never have to explain anything to your possibly confused
local bank clerks. The bottom line is that you are guaranteeing to all
banks that the paper draft is a valid authorized instrument. And since
your bank knows who you are, they guarantee your endorsement. If the
customer's bank calls them, the customer will naturally confirm the check.
[FAQ Index]
- Okay...
so it's all legal and my bank will accept them for deposit, but how does it work?
- The process will differ slightly by whether you are taking checks by telephone, fax, email or some online ordering system. Basically it is very
similar to the process businesses use to take credit card payments over
the phone. You or your employees will take the bank routing number,
checking account number and other items commonly found on a check.
We've provided a basic sample phone script to help you capture all the
information you need. Many people type the information directly into
TurboDraft as they are receiving it; others take the information on the
script form and "batch" the data entry at a later time. You then print
out the paper drafts (checks) on each customer's checking account with
you or your business as the payee. Last step is to deposit the checks!
That's really about all there is to it!
[FAQ Index]
- Are
you sure my customers won't have problems or fears about giving me this information over the phone?
- Initially, some may question you because they have never heard of
such a service. Our basic sample phone script will help you with the
flow of the transaction. Furthermore, be sure to let them know that
customer confidentiality is maintained, since they are providing you
with no more information that is on the face of the check! You will
have no problem putting their concerns to rest by emphasizing the
convenience of phone checks, reminding them that you'll have the same
information once you receive the check and comparing this to their
acceptance of giving out even more critical credit card information
over the phone! Let them know that you print all paper drafts yourself;
that you don't send them out to a service or unknown person.
[FAQ Index]
- I've
heard there
are businesses who provide this type of service, why shouldn't I just use one of these Service Bureaus?
- The question is really -- why should you now? Almost all of them
charge a setup fee from $50 to as high as $295. Some charge a monthly
maintenance fee from $25.00-$60.00. And others naturally have to tack
on a data entry printing charge from $.20-$1.50 per check. Then they
demand a cut of the action by charging you a fixed amount of $.75 to
$3.00 per check. And worse -- many even charge you a percentage (1%
to 1 3/4%) of the check amount. Why should a middle man get a cut of
your efforts? There are always hassles when dealing with a middle man
in any situation. Besides, you still are having to wait for a check to
arrive in the mail! Oh... sure... many of these services offer to
overnight the paper drafts to you, if you pay the $10 in shipping fees!
Before TurboDraft, when it cost as much as $895 for software
that permitted the printing of paper drafts in-house, many people opted to use service bureaus. But now that you can purchase TurboDraft for only $149.95 -- what's there to think about?
[FAQ Index]
[Turbodraft Home Page]
- Wouldn't
most people prefer
to use Credit Cards over using checks?
- Most people use credit cards because of the convenience, which with
TurboDraft can now be offered to any person with a checking account.
A 1992 report cited the fact that 48% of consumers prefer to pay by
check, 32% prefer to pay with cash and a mere 18% prefer to pay using
a credit card! And the more credit card companies stick-it-to-consumers
by adding more fees and raising interest rates, the more consumers will
rely on paying for purchases by check or cash. And don't forget that
there are 75 million Americans who don't have a credit card and millions
more with credit cards that are at their credit limits.
As a business owner, accepting checks by telephone, fax, or online can help
you protect your current credit card merchant account! Both Visa and
Master Card place accounts at risk of termination if their charge-backs
approach 1%. Once on the "Terminated" list, it is substantially more difficult to
arrange another merchant account, even with a different bank. And
the horrors of these companies coming after merchants when a credit card
customer fails to pay his/her credit card is not unheard of...
[FAQ Index]
- Where
do I get blank checks?
- When you register your copy of TurboDraft, we will send you 50 blank
checks for just $6.00; or 100 blank checks for only $10.00. When you need
more checks, you can locate a local supplier or order them from us. Just
send email to turbodraft@finanswers.com and you'll be sent a supply form
with prices.
[FAQ Index]
- What
about needing to purchase an
expensive Magnetic Toner cartridge for my laser printer?
- You can certainly do this if you want and we offer the best prices available for
special MICR toner cartridges for most laser printers. Click here to check
our current MICR toner prices. Many people, however, do
not use such a cartridge. The toner found in normal laser cartridges contains
a small amount of magnetic particles naturally. Add to this
estimates that as many as 80% of banks have already gone to OCR (Optical
Character Recognition) and banks are allowed a 10% automated rejection
rate, and you can make your own decision. There are some people who
actually use an Inkjet or BubbleJet printer instead of a laser printer
and have no problems! A dot matrix printer will not work.
[FAQ Index]
- How
safe is Online Ordering?
I've heard that it is unsafe to provide financial or payment information over the Internet.
- If you integrate a 2 Step order process, both for electronic mail
and World Wide Web, with TurboDraft, your customers' payment information
is never sent across the internet in one message. It is very, very
unlikely that someone would be able to intercept both email messages,
which must happen for them to get all your payment information. For
more information on the integration of a 2 Step order process and online
ordering with TurboDraft, see the section TurboDraft-
Your Bridge to Online Orders! We also provide you with sample e-mail messages and HTML
Coded WWW Pages that incorporate the 2 step process. These are included
FREE when you download TurboDraft! You will also notice an
explanation for your customers is included on the order forms.
[FAQ Index]
- What
exactly is this 2 Step Order Process?
And how does TurboDraft fit into the picture?
- A 2 step order process is a convenient and easy security feature that
removes almost all risk of providing financial payment information in
online order forms or e-mail messages. TurboDraft makes it all possible
because you can accept payment for goods or services through web pages or
email messages... just like credit cards.
The first step, for example, involves completing page 1
where your customer will enter their name, address, and only a portion of their credit card
information (name, card type, exp date) or of the check information
that appears on the face of your check (name, address, bank name, bank
address, routing number, ratio).
After your customer submits page 1 of your order form,
they will be taken to page 2, which is where you will provide the remaining information
(account# for checks payments; expiration date for credit card payments). Page two is
also where they would indicate the products/quantities they wish to register or order.
The same procedure is followed for e-mail orders, separating the payment
information in different messages.
Besides providing significant protection against the stealing of payment
information, this process can be implemented by any business person for
almost no cost. It also doesn't depend on proprietary secure server
technology, which leaves those not running the proprietary software without
any protection. Basically, you'll be able to offer a relatively safe method
for transactions to a much larger number of people.
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