Consumers are generally aware that arrangements can be made for recurring payments, such as mortgage payments or car payments, to be withdrawn automatically from their checking accounts. During the rulemaking, the Commission learned that millions of consumers use demand drafts in lieu of credit cards and that demand drafts are used by Fortune 500 companies, airlines, car rental companies, insurance companies, and mortgage companies. In fact, demand drafts are used by a variety of businesses that are characterized by quick turn-around transactions, and as a payment alternative for consumers who do not have, or would rather not use, credit cards.
Demand drafts are a large and growing payment mechanism.
Print a bank draft on official check safety paper that we provide. Then cash or deposit. Fax, email and telephone checks are legal tender with proper authorization from your customer. Once you've received pre-authorization, no signature is needed. The tape recording must show that the consumer received each piece of information listed below and that, based on that information, the consumer understood and acknowledged each term of the transaction, and authorized the transaction.