Good Morning! I have a few questions about when a customer authorizes another company to issue a check on their account over the telephone. For example, someone wants to pay a credit card bill, and they provide the credit card company with the name and routing number of the bank, their account number and check number. The company then sends a paper item through the system and it is processed throgh the customer's account as if they wrote the check.

First, is there a bank-wide term for this type of payment?

Second, are these types of items treated exactly like regular checks that a customer would write on their own account, with the same return standards, etc?

Lastly, could it be considered an electronic item because it's authorized electronically?

I wish it could be considered an electronic item. The paper drafts are treated as checks with the same return guidelines.

If you search using the term "demand draft," you will find prior discussions.

Thank you both! You have given me the two terms I can use to do further research.

In its recently-released final rules for Check 21 implementation (Subpart D of Regulation CC), the Fed has said it intends to float a proposed rule governing these "remotely created consumer drafts" as they are termed. In some states, there are transfer and presentment warranties as to the authorization of these drafts, and the Fed will propose to extend those warranties to all states.

It could not happen too soon!