Method and system for account verification

• US 20070260536A1
• Filed: 05/02/2006
• Published: 11/08/2007
• Est. Priority Date: 05/02/2006
• Status: Active Grant

• Current Assignee: CC Serve Corp. (Atlanticus Holdings Corporation)
• Original Assignee: Compucredit Intellectual Property Holdings Corporation II
• Inventors: Stone, Brian
• Granted Patent: US 8,041,640 B2
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/0855 involving a third party
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/1085 involving automatic teller machines [ATMs]
• CPC Class Codes: G06Q 20/3674 involving authentication
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A system and method for verifying the existence of a deposit account, such as a checking account, are provided. The system and method may also be used to determine whether the deposit account is configured to receive automatic transactions for withdrawal. For example, a lender may extend an offer of credit to a borrower where payments of principal and interest are to be made by automatic withdrawals. Prior to transferring the principal, the lender verifies the existence and configuration of the borrower'"'"'s deposit account by charging a fee to establish the line of credit and retrieving the fee by automatic withdrawal. Once the transaction clears and the lender receives the fee, the lender is assured that the account does exist and is configured to receive automatic transactions. Two exemplary methods of retrieving the fee are electronic funds transfer and remote creation of a paper negotiable instrument.

Claims

1. A method for determining whether a deposit account is configured to accept automatic transactions, the method comprising the steps of:

a. receiving a request for a line of credit, wherein payments on the line of credit are to be paid by recurring automatic withdrawals;

b. requesting a fee to establish the line of credit, wherein the fee is to be drawn from the deposit account;

c. executing an automatic withdrawal from the deposit account for the fee, wherein the automatic withdrawal comprises one of an electronic funds transfer and a remote creation of a paper negotiable instrument; and

d. withholding approval of the line of credit until the automatic withdrawal from the deposit account for the fee is completed.

2. The method of claim 1, wherein the step of withholding approval comprises providing a line of credit card and prohibiting transaction processing until the automatic withdrawal from the deposit account for the fee is completed.

3. The method of claim 1, wherein the step of withholding approval comprises prohibiting establishment of a line of credit account until the automatic withdrawal from the deposit account for the fee is completed.

4. The method of claim 1, wherein the automatic withdrawal from the deposit account for the fee comprises a withdrawal entry in an automated clearing house network.

5. The method of claim 4, wherein the deposit account is held by a receiving depository financial institution.

6. The method of claim 5, wherein the withdrawal entry is executed by an originating depository financial institution.

7. The method of claim 1, wherein the automatic withdrawal comprises a withdrawal executed by a paper negotiable instrument, further wherein the paper negotiable instrument comprises a remote check creation.

8. The method of claim 1, wherein a mode for executing the automatic withdrawal from the deposit account for the fee is user selectable, wherein optional modes comprise the electronic funds transfer and the remote creation of a paper negotiable instrument.

9. The method of claim 8, wherein the fee is less when the user selection comprises the electronic funds transfer than when the user selection comprises the remote creation of a paper negotiable instrument.

10. The method of claim 1, further comprising the step of delivering terms and conditions associated with the automatic withdrawal, wherein the terms and conditions comprise a notice that the deposit account will be debited for the fee.

11. The method of claim 1, wherein the request for credit comprises credit contingent upon obtaining a one-time authorization to execute the recurring automatic withdrawals from the deposit account, wherein the one-time authorization comprises a selection from a plurality of repayment options, wherein at least one of the plurality of repayment options comprises a withdrawal executed by electronic funds transfer.

12. The method of claim 1, further comprising the steps of

a. obtaining a routing number for the deposit account;

b. obtaining an identification number for the deposit account; and

c. obtaining a one-time authorization to execute the recurring automatic withdrawals from the deposit account, wherein the one-time authorization comprises a selection from a plurality of repayment options, wherein at least one of the plurality of repayment options comprises a withdrawal executed by remote electronic funds transfer.

13. A system for determining whether a deposit account is configured to accept automatic transactions, the system comprising:

a. a network information server configured to deliver browser readable content to a client terminal having a browser in communication with the Internet, the network information server providing at least credit application content to the browser with which an applicant may submit a request for a line of credit, wherein the credit application content comprises an authorization for payments to be paid by recurring automatic withdrawals from the deposit account, further wherein the credit application content comprises a user selectable authorization for a fee to establish the line of credit, wherein the fee is to be automatically withdrawn from the deposit account;

b. a withdrawal unit operable with the network information server, the withdrawal unit being configured to execute an automatic withdrawal from the deposit account for the fee, wherein the automatic withdrawal comprises one of an electronic funds transfer and a creation of a paper negotiable instrument; and

c. an approval unit operable with the withdrawal unit, wherein the approval unit is configured to withhold approval of the line of credit until the automatic withdrawal from the deposit account for the fee is completed.

14. The system of claim 13, wherein the automatic withdrawal comprises a withdrawal entry in an automated clearing house network.

15. The system of claim 13, wherein the automatic withdrawal comprises remote creation of a paper negotiable instrument.

16. The system of claim 13, further comprising an authorization unit operable with the approval unit, wherein the authorization unit if configured to authorize the line of credit only where an authorization to execute recurring automatic withdrawals from the deposit account is received from the network information server.

17. A computer useable code having embodied therein instructions for determining whether a deposit account is configured to accept automatic transactions, the computer usable code comprising:

a. an offer module configured to deliver a line of credit application comprising an authorization for payments to be paid by recurring automatic withdrawals from the deposit account, the line of credit application further comprising a user selectable authorization for a fee to establish the line of credit, wherein the fee is to be automatically withdrawn from the deposit account;

b. a withdrawal module configured to automatically withdraw the fee from the deposit account by one of an electronic funds transfer and a remotely created paper negotiable instrument; and

c. an approval module configured to withhold approval of the line of credit until the automatic withdrawal from the deposit account completed.

18. The computer useable code of claim 17, wherein the automatic withdrawal comprises a withdrawal entry in an automated clearing house network.

19. The computer useable code of claim 17, wherein the automatic withdrawal comprises remote creation of a paper negotiable instrument.

20. The computer useable code of claim 17, further comprising an authorization module configured to authorize the line of credit only where an authorization to execute recurring automatic withdrawals from the deposit account is received.