Is This Method of PFD Legal?

[jbh]

Hey,

I read in another thread a suggestion that I ASSUME is not kosher but I really do not know. (Note: I understand if this is edited I just had to ask)

The idea was that instead of just a basic PFD letter, you send the payment but on the back of the check you state something to the tune of "By cashing this you agree to delete xyz" etc. You get the idea. In other words, you provide them the *option* to cash it with that notice.

Personally, I would assume it's not allowed but I really do NOT know.

Thoughts?

PS. I do not endorse this but it did intrigue me for its creativity. I apologize if this violates TOS (hides under desk)

[Anonymous]

Yes its legal. Will they delete the account? Don't count on it.

Message Edited by Justn on 08-04-2008 02:47 PM

[jbh]

Which leads to the potential can of worms. One can fax the CRA the 'terms' on the back and use that as a dispute. I'm not sure how that will be received.

This is where I wish I had 'lawyer in a can'. Just shake and voila, instant protection

[Anonymous]

What you're talking about is called a "Restrictive Endorsement" and is not legally binding in MOST states. Even in most of the states willing to recognize it, it must be accompanied by a legally binding document, signed by both parties, agreeing to all of the terms.

It's not worth the risk, in MHO. Even if your state doesn't penalize for its use, if the CA decides to be a jerk about it, they can cash it and take you to court for the remainder.

So, send one but be prepared for it to 1) not be cashed 2) for it to be cashed and the restrictions completely ignored or 3) for it to be cashed, the restrictions completely ignored and taken to court for the balance.

[Anonymous]

It is "legally binding" in the following states:
Arkansas
Colorado
Connecticut
Georgia
Kansas
Louisiana
Maine
Michigan
Nebraska
New Jersey
North Carolina
Oregon
Pennsylvania
Texas
Utah
Vermont
Virginia
Washington
Wyoming

[Anonymous]

justin -

so you are saying that in the states you have listed.....you could write that on the back on the check and if they cash it....then it's a contract?

i always thought about doing this for accounts that are beyond SOL and will not accept a PFD.

say they accept the check....but refuse to delete the account....what could your actions be?
if they accept it....but do not delete....would this reset SOL?

[jbh]

By 'legally binding in a state' do you refer to the state of the CA's main headquarters, where they receive the check or the address of the individual?

Interesting, to say the least. Though, personally, I prefer to use the FTC and harass them

[Anonymous]

I would only recommend trying this as a last resort!!!

---

@jbh wrote:
By 'legally binding in a state' do you refer to the state of the CA's main headquarters, where they receive the check or the address of the individual?

---

I'm not %100 sure, But I think it would be the state that the check is cashed in.

---

@Anonymous wrote:
so you are saying that in the states you have listed.....you could write that on the back on the check and if they cash it....then it's a contract?

---

Yes, but don't take my word for it. Always do your research before attempting something like this.

[Anonymous]

According to the VA statutes, a R/E is NOT legally binding ... I cite VA because I'm fairly familiar with their laws since I grew up there.

§ 8.3A-206. Restrictive endorsement.

(a) An endorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument.

(b) An endorsement stating a condition to the right of the endorsee to receive payment does not affect the right of the endorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.

Also, in a large majority of the states you've cited, the CA simply either striking out the R/E or writing "under protest" (or something else to that effect) is enough to render it useless. If it's established that cashing the check does NOT constitute "Accord and satisfaction" it's not legally binding -- in most cases.

[Anonymous]

---

@Anonymous wrote:
§ 8.3A-206. Restrictive endorsement.

(a) An endorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument is not effective to prevent further transfer or negotiation of the instrument.

(b) An endorsement stating a condition to the right of the endorsee to receive payment does not affect the right of the endorsee to enforce the instrument. A person paying the instrument or taking it for value or collection may disregard the condition, and the rights and liabilities of that person are not affected by whether the condition has been fulfilled.

---

Ok You win. I can't argue with that. The internet is full of bad information and I just contributed to it. I had read that info off another forum, But obviously it was incorrect. Thanks for setting me strait.

Message Edited by Justn on 08-04-2008 05:44 PM