Automated payment system

• US 5,504,677 A
• Filed: 10/15/1992
• Issued: 04/02/1996
• Est. Priority Date: 10/15/1992
• Status: Expired due to Term

• Current Assignee: Ontario Systems, LLC
• Original Assignee: National Credit Management Corporation
• Inventors: Pollin, Robert E.
• Primary Examiner(s): Bell, Paul A.
• Application Number:
  US07/959,930
• Time in Patent Office: 1,265 Days
• Field of Search: 283/67, 283/57, 283/58, 283/117, 364/401, 364/400, 364/406, 364/408
• US Class Current: 705/45
• CPC Class Codes: G06Q 20/04 Payment circuits
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 20/4037 Remote solvency checks
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/128 Check-book balancing, updating or printing arrangements
• CPC Class Codes: G07F 7/08 by coded identity card or credit card or other personal identification means without personal verification means G07F7/02

Abstract

A system and method of collecting payments uses an automated system to generate a draft, payable to the creditor and drawn on the payor'"'"'s checking account, pursuant to the payor'"'"'s authorization. The draft is then executed by the debt collector as authorized signatory for the payor, and deposited into the payee'"'"'s account to complete payment. The automated system has a simple input screen which receives the necessary information for generation of the draft, which may be read to the system operator over the telephone by the authorizing payor. The system verifies the bank and account information by comparing the input information to records in a database associated with the system. Optionally, the system may also generate an inquiry to the bank to determine the availability of funds in the payor'"'"'s account. When verification is complete, the system generates a paper bank draft payable to the payor, using MICR ink so that the draft can be processed in the banking system like an ordinary check. The signature block of the draft is made for the collection agent "as authorized signatory for" the payor.

Claims

1. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to one of a fixed set of one or more payees, comprising:

input means for performing a manual input process wherein a system operator enters information specifying a new payor previously unknown to the apparatus and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, postal address of the payor, and an amount to be drafted from said payor'"'"'s account;

a postal zone code database of high-risk postal zone codes which have been empirically associated with an elevated risk of payment fraud;

zip code verification means connected to said input means and said postal zone code database for comparing said postal address of said payor with entries in said postal zone code database and providing an output indication during said manual input process when said payor'"'"'s postal address has one of said high-risk postal zone codes, whereby additional steps may be taken to verify the ability to process said draft;

processing means connected to said input means for receiving said input information and processing said information to format drafts on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, said payor'"'"'s address, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment.

16. The apparatus of claim 1 wherein a plurality of said input means are provided at a plurality of remote locations and connected to transmit said input information to said processing means which is installed at a central location to produce drafts for said plurality of input means.

17. The apparatus of claim 16 wherein said institution verification means are provided at the remote locations.

18. The apparatus of claim 17 wherein said input means comprises keying means for receiving a manual input of information into at least one data entry screen as part of said electronic information input process and said institutional verification means includes means for obtaining the financial institution identification number in a manual key entry step and generating an indication to the operator during said manual key entry step if said input information does not correctly identify a financial institution for which information is present in said database.

19. The apparatus of claim 1 further comprising automatic funds verification means for electronically transmitting a message seeking information on the availability of funds to cover a draft generated by said apparatus.

20. The apparatus of claim 19 wherein said institutional database comprises fax telephone numbers of the financial institutions and wherein the automatic funds verification means comprises a fax modem and means for automatically and electronically formatting and transmitting, to the payor'"'"'s financial institution at a fax telephone number retrieved from said institutional database, a fax message requesting notification if funds are not available for a draft.

21. The apparatus of claim 19 wherein said automatic funds verification means comprises means for automatically contacting a third party check guarantee service and electronically submitting a description of a draft to be processed and an order for payment guarantee service relating to the draft.

2. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to one of a fixed set of one or more payees, comprising:

input means for performing a manual input process wherein a system operator enters information specifying a new payor previously unknown to the apparatus and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, and an amount to be drafted from said payor'"'"'s account;

processing means connected to said input means for receiving said input information and processing said information to format drafts on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

wherein said apparatus is implemented on a computer using software which incorporates security measures for preventing fraudulent draft production, said security measures comprising the coded imbedding of said identification of said payee in said software whereby that payee information appearing on said drafts cannot be readily modified by a person gaining unauthorized access to said software.

3. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to one of a fixed set of one or more payees, comprising:

input means for performing an electronic information input process wherein a system operator enters information specifying a new payor previously unknown to the system and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, and an amount to be drafted from said payor'"'"'s account;

an institutional database comprising financial institution identification information;

institution verification means for receiving said financial institution identification number and comparing said financial institution identification number to entries in said institutional database, wherein when said financial institution is found in the institutional database, the institution verification means retrieves identifying information about the institution and verifies the accuracy of said financial institution identification number, and wherein when said financial institution is not found in the institutional database, an error indication is generated;

processing means connected to said input means for receiving said input information and processing said information to format a draft on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

a database of high-risk postal zone codes which have been empirically associated with an elevated risk of payment fraud; and

zone warning means for comparing said postal address of said payor with said postal zone code database and providing an output indication when said payor'"'"'s postal address is one of said high-risk postal zone codes, whereby additional steps may be taken to verify the ability to process said draft.

4. The apparatus of claim 3 wherein said external magnetic printing means is a laser printer using an MICR toner cartridge.

5. The apparatus of claim 3 wherein said input means comprises keying means for receiving a manual input of information into at least one data entry screen as part of said electronic information input process.

6. The apparatus of claim 5 wherein said institution verification means operates to perform said comparison of a portion of said input information from said input means to said financial institution identification number during said manual input and provides immediately thereafter an indication to the operator if said financial institution identification number does not correctly identify a financial institution for which information is present in said database.

7. The apparatus of claim 3 further comprising account identifier verification means for checking said payor account identifier according to a predetermined algorithm to determine whether said account identifier can be a valid account identifier for said financial institution, and thereafter provides an output indication if such processing determines that said account identifier may be invalid.

8. The apparatus of claim 7 wherein said institutional database includes account identifier checking algorithms associated with financial institutions, and said account identifier verification means further comprises means for retrieving an account identifier checking algorithm from said institutional database for the payor'"'"'s financial institution, whereby said account identifier checking algorithm is used by said account identifier verification means to determine whether said account identifier can be a valid account identifier for said financial institution.

9. The apparatus of claim 7 wherein said account identifier verification means checks said account identifier during a manual key entry step of said information input process to determine whether said account identifier can be a valid account number, and thereafter immediately provides an indication to said operator if such processing determines that said account number is facially invalid.

10. The apparatus of claim 3 wherein said output indication is provided to the operator during a manual keying step of said information input process.

11. The apparatus of claim 3 further comprising scheduling means connected to said input means and said processing means for receiving information defining a postdated draft to be generated by the system, said draft to have a date not prior to a specified future date.

12. The apparatus of claim 11 wherein said scheduling means includes storage means for storing said postdated draft information and for recalling said information and generating said draft on or after said specified date.

13. The apparatus of claim 12 further comprising notification means associated with said scheduling means for automatically generating a written notice to said payor indicating that said authorized future draft will be generated and deposited as a draft against said payor'"'"'s account.

14. The apparatus of claim 11 wherein said scheduling means schedules the generation of said drafts at regular periodic intervals until receiving a new instruction to cease scheduling said drafts at said regular intervals.

15. The apparatus of claim 11 wherein said scheduling means schedules generation of said drafts on dates specified by said payor and having varying amounts specified by said payor to complete a payment of said debt.

22. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payers, the drafts payable to one of a fixed set of one or more payees, comprising:

input means for performing an electronic information input process wherein a system operator enters information specifying a new payer previously unknown to the system and a draft to be generated on an account of that payer, said information including a financial institution identification number, payer account identifier, and an amount to be drafted from said payer'"'"'s account;

an institutional database comprising financial institution identification information;

institution verification means for receiving said financial institution identification number and comparing said financial institution identification number to entries in said institutional database, wherein when said financial institution is found in the institutional database, the institution verification means retrieves identifying information about the institution and verifies the accuracy of said financial institution identification number, and wherein when said financial institution is not found in the institutional database, an error indication is generated;

processing means connected to said input means for receiving said input information and processing said information to format a draft on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payer'"'"'s signature; and

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

wherein said system is implemented on a computer using software which incorporates security measures for preventing fraudulent draft production, said security measures comprising the coded imbedding of said payee identification information in said software so that payee information appearing on said drafts cannot be readily modified by a person gaining unauthorized access to said software.

23. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to a payee, comprising:

input means for performing an electronic information input process wherein a system operator enters information specifying a new payor previously unknown to the system and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, and an amount to be drafted from said payor'"'"'s account;

an institutional database comprising financial institution identification information;

institution verification means for receiving said financial institution identification number and comparing said financial institution identification number to entries in said institutional database, wherein when said financial institution is found in the institutional database, the institution verification means retrieves identifying information about the institution and verifies the accuracy of said financial institution identification number, and wherein when said financial institution is not found in the institutional database, an error indication is generated;

processing means connected to said input means for receiving said input information and processing said information to format a draft on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to a local magnetic printing means connected to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

a database of high-risk postal zone codes which have been empirically associated with an elevated risk of payment fraud; and

zone warning means for comparing said postal address of said payor with said postal zone code database and providing an output indication when said payor'"'"'s postal address is one of said high-risk postal zone codes, whereby additional steps may be taken to verify the ability to process said draft.

24. The apparatus of claim 23 wherein said input means comprises keying means for receiving a manual input of information into at least one data entry screen as part of said electronic information input process.

25. The apparatus of claim 24 wherein said institution verification means operates to perform said comparison of a portion of said input information from said input means to said financial institution identification number during said manual input and provides immediately thereafter an indication to the operator if said financial institution identification number does not correctly identify a financial institution for which information is present in said database.

26. The apparatus of claim 23 further comprising account identifier verification means for checking said payor account identifier according to a predetermined algorithm to determine whether said account identifier can be a valid account identifier for said financial institution, and thereafter provides an output indication if such processing determines that said account identifier may be invalid.

27. The apparatus of claim 26 wherein said account identifier verification means checks said account identifier during a manual key entry step of said information input process to determine whether said account identifier can be a valid account number, and thereafter immediately provides an indication to said operator if such processing determines that said account number is facially invalid.

28. The apparatus of claim 23 wherein said output indication is provided to the operator during a manual keying step of said information input process.

29. The apparatus of claim 23 further comprising scheduling means connected to said input means and said processing means for receiving information defining a postdated draft to be generated by the system, said draft to have a date not prior to a specified future date.

30. The apparatus of claim 29 wherein said scheduling means includes storage means for storing said postdated draft information and for recalling said information and generating said draft on or after said specified date.

31. The apparatus of claim 30 further comprising notification means associated with said scheduling means for automatically generating a written notice to said payor indicating that said authorized future draft will be generated and deposited as a draft against said payor'"'"'s account.

32. The apparatus of claim 29 wherein said scheduling means schedules the generation of said drafts at regular periodic intervals until receiving a new instruction to cease scheduling said drafts at said regular intervals.

33. The apparatus of claim 29 wherein said scheduling means schedules generation of said drafts on dates specified by said payor and having varying amounts specified by said payor to complete a payment of said debt.

34. The apparatus of claim 23 wherein a plurality of said input means are provided at a plurality of remote locations and connected to transmit said input information to said processing means which is installed at a central location to produce drafts for said plurality of input means.

35. The apparatus of claim 34 wherein said institution verification means are provided at the remote locations.

36. The apparatus of claim 35 wherein said input means comprises keying means for receiving a manual input of information into at least one data entry screen as part of said electronic information input process and said institutional verification means includes means for obtaining the financial institution identification number in a manual key entry step and generating an indication to the operator during said manual key entry step if said input information does not correctly identify a financial institution for which information is present in said database.

37. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to a payee, comprising:

input means for performing an electronic information input process wherein a system operator enters information specifying a new payor previously unknown to the system and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, and an amount to be drafted from said payor'"'"'s account;

an institutional database comprising financial institution identification information;

institution verification means for receiving said financial institution identification number and comparing said financial institution identification number to entries in said institutional database, wherein when said financial institution is found in the institutional database, the institution verification means retrieves identifying information about the institution and verifies the accuracy of said financial institution identification number, and wherein when said financial institution is not found in the institutional database, an error indication is generated;

processing means connected to said input means for receiving said input information and processing said information to format a draft on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to have said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature; and

output means for transferring said draft formats to a local magnetic printing means connected to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

wherein said system is implemented on a computer using software which incorporates security measures for preventing fraudulent draft production, said security measures comprising the coded imbedding of said payee identification information in said software so that payee information appearing on said drafts cannot be readily modified by a person gaining unauthorized access to said software.

38. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to a payee, comprising:

input means for performing a manual input process wherein a system operator enters information specifying a new payor previously unknown to the apparatus and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, postal address of the payor, and an amount to be drafted from said payor'"'"'s account;

a postal zone code database of high-risk postal zone codes which have been empirically associated with an elevated risk of payment fraud;

zip code verification means connected to said input means and said postal zone code database for comparing said postal address of said payor with entries in said postal zone code database and providing an output indication during said manual input process when said payor'"'"'s postal address has one of said high-risk postal zone codes, whereby additional steps may be taken to verify the ability to process said draft;

processing means connected to said input means for receiving said input information and processing said information to format drafts on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, said payor'"'"'s address, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment.

39. An automated apparatus for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payors, the drafts payable to a payee, comprising:

input means for performing a manual input process wherein a system operator enters information specifying a new payor previously unknown to the apparatus and a draft to be generated on an account of that payor, said information including a financial institution identification number, payor account identifier, and an amount to be drafted from said payor'"'"'s account;

processing means connected to said input means for receiving said input information and processing said information to format drafts on said financial account payable to said payee, said draft format including identification of said financial account, identification of said financial institution holding said financial account, and an instruction to pay said amount to said payee including particular identification of said payee, and further including a signatory block for an authorizing signature other than said payor'"'"'s signature;

output means for transferring said draft formats to an external magnetic printing means connectable to said processing means for generating a paper copy of said drafts using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

wherein said apparatus is implemented on a computer using software which incorporates security measures for preventing fraudulent draft production, said security measures comprising the coded imbedding of said identification of said payee in said software whereby that payee information appearing on said drafts cannot be readily modified by a person gaining unauthorized access to said software.

40. The apparatus of claim 39 wherein said input means comprises keying means for receiving a manual input of information into at least one data entry screen as part of said electronic information input process.

41. The apparatus of claim 40 wherein said institution verification means operates to perform said comparison of a portion of said input information from said input means to said financial institution identification number during said manual input and provides immediately thereafter an indication to the operator if said financial institution identification number does not correctly identify a financial institution for which information is present in said database.

42. The apparatus of claim 39 further comprising account identifier verification means for checking said payor account identifier according to a predetermined algorithm to determine whether said account identifier can be a valid account identifier for said financial institution, and thereafter provides an output indication if such processing determines that said account identifier may be invalid.

43. The apparatus of claim 42 wherein said account identifier verification means checks said account identifier during a manual key entry step of said information input process to determine whether said account identifier can be a valid account number, and thereafter immediately provides an indication to said operator if such processing determines that said account number is facially invalid.

44. The apparatus of claim 39 further comprising a database of high-risk postal zone codes which have been empirically associated with an elevated risk of payment fraud, and zone warning means for comparing said postal address of said payor with said postal zone code database and providing an output indication when said payor'"'"'s postal address is one of said high-risk postal zone codes, whereby additional steps may be taken to verify the ability to process said draft.

45. The apparatus of claim 44 wherein said output indication is provided to the operator during a manual keying step of said information input process.

46. The apparatus of claim 39 further comprising scheduling means connected to said input means and said processing means for receiving information defining a postdated draft to be generated by the system, said draft to have a date not prior to a specified future date.

47. The apparatus of claim 39 wherein a plurality of said input means are provided at a plurality of remote locations and connected to transmit said input information to said processing means which is installed at a central location to produce drafts for said plurality of input means.