Faxed or "Virtual Checks" - 100% Legal
Checks created by any other than the checking
account holder are called "paper drafts". Telephone checks (pre-authorized
paper bank drafts) are also 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, usually in collections.
The primary requirement is that the checking
account holder (the customer) must give a verbal or written pre-authorization,
such as faxing their check with his or her signature, or digitally uploading
it with a statement of authorization. Once the pre-authorization is received,
the signature on the paper-draft isn't a requirement, 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 . Also see Romani v. Harris,
255 Md. 389.
If your bank has any questions, refer to the
Uniform Commercial Codes referenced above.