Automated payment system and method

• US 6,041,315 A
• Filed: 06/19/1997
• Issued: 03/21/2000
• Est. Priority Date: 10/15/1992
• Status: Expired due to Term

• Current Assignee: Ontario Systems, LLC
• Original Assignee: Autoscribe Corporation
• Inventors: Pollin, Robert E.
• Primary Examiner(s): Voeltz, Emanuel Todd
• Assistant Examiner(s): KALINOWSKI, ALEXANDER G
• Application Number:
  US08/879,022
• Time in Patent Office: 1,006 Days
• Field of Search: 705/34, 705/35, 705/40, 705/45, 705/44
• 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 system for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payers, in payment of debts to a payee, comprising:

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

an institutional database comprising financial institution identification information;

institution verification means associated with said input 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; and

output means connected to said input means for receiving said information specifying a draft and generating a paper copy of said draft.

2. The system of claim 1 wherein said output means is a laser printer using an MICR toner cartridge.

3. The system of claim 1 wherein a plurality of said input means are provided at different 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.

4. The system of claim 1 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.

5. The system of claim 4 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.

6. The system of claim 4 wherein said scheduling means schedules generation of said drafts on dates specified by said payer and having amounts specified by said payer to complete a payment of said debt.

7. An automated system for generating authorized drafts on a plurality of financial accounts belonging to a plurality of payers, in payment of debts to a payee, comprising:

input means for performing an electronic information input process in which input information is received, including a manual input of account identification information sufficient to identify a particular one of said paver financial accounts and a financial institution holding said account, and amount information defining an amount to be paid to said payee;

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;

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

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, said scheduling means including storage means for storing said postdated draft information and for recalling said information and generating said draft on or after said specified date; and

notification means associated with said scheduling means for automatically generating a written notice to said payer indicating that said authorized future draft will be generated and deposited as a draft against said payer'"'"'s account.

8. A process for making automated payments from a payer having a financial account at a financial institution to a payee based on authorization in a telephone conversation between the payer and a system operator representing the payee, comprising the steps of:

providing an automated draft production computing system having an input screen for receiving draft input information;

conducting a telephone conversation with a payee previously unknown to the computing system, in which said system operator obtains said draft input information, including at least identification of said financial account and a financial institution identification code identifying said financial institution holding said financial account, and contemporaneously enters said draft input information in said input screen;

using said computing system, automatically verifying said financial institution identification code contemporaneously with system operator entry of said draft input information, by comparing said code to entries in an institutional database and determining whether said code matches an entry in the database;

if said code matches an entry in the database, retrieving identifying information about the institution and displaying said identifying information for the system operator whereby the system operator may verify institution identification with the payer;

if said code does not match an entry in the database, displaying an error indication to the system operator whereby the operator may request corrected information from the payer;

using said input information, printing said authorized draft payable to said payee on a printing device associated with said computing system, said draft having thereon an order to pay an amount authorized by said paver to said payee, a signatory block for an authorizing indicia other than said payer'"'"'s signature, and financial institution and account information printed using fonts and ink compatible with banking system automated check clearing systems such that said draft can be automatically processed by said check clearing systems; and

submitting said draft to said automated check clearing system for further processing therein to cause a transfer of funds from said payer account to said payee.

9. The process of claim 8 wherein said draft production computing system is provided in geographically separated components, including a plurality of dispersed data entry computing systems for performing data collection and verification functions, with each said data entry computing system connected to transmit to a central draft production center draft production data defining the draft to be printed, such that the step of printing said draft is performed at said central draft production center, said process including the further step of transmitting said draft production data to said central draft production center to cause production of said draft.

10. An automated process for making payments from a payer having a financial account at a financial institution to a payee based on authorization in a telephone conversation between the payer and a system operator representing the payee, comprising the steps of:

providing an automated payment order computing system having an input screen for receiving payment order input information;

conducting a telephone conversation with a payee who has not previously authorized payments to payee by telephone, in which said system operator obtains said payment order input information, including at least identification of said financial account and a financial institution identification code identifying said financial institution holding said financial account, and contemporaneously enters said payment order input information in said input screen;

using said computing system, automatically verifying said financial institution identification code contemporaneously with system operator entry of said draft input information, by comparing said code to entries in an institutional database and determining whether said code matches an entry in the database;

if said code matches an entry in the database, retrieving identifying information about the institution and displaying said identifying information for the system operator whereby the system operator may verify institution identification with the payer;

if said code does not match an entry in the database, displaying an error indication to the system operator whereby the operator may request corrected information from the payer;

using said input information, generating an electronic record containing information sufficient to generate an order to pay an amount authorized by said payer to said payee; and

processing said electronic record and transmitting information to a central clearing system for processing to cause a transfer of funds from said payer account to said payee.

11. 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 a manual input process wherein a system operator contemporaneously enters information sufficient to identify a new payer previously unknown to the apparatus and information specifying 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 of financial institution information;

validity verification means for retrieving a record from said institutional database corresponding to the payer'"'"'s financial institution and checking said account identifier according to an algorithm established for the payer'"'"'s financial institution to determine whether said account identifier can be a valid account identifier, and providing an output indication during the manual input process if such checking establishes that said account identifier may be invalid; and

processing means connected to said input means for receiving said input information and processing said information to print drafts on said financial account payable to said payee, said draft 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.

12. A standalone personal computer apparatus for receiving input information and automatically printing authorized drafts on a plurality of financial accounts belonging to a plurality of payers, in payment of debts to a payee, comprising a personal computer, with a display screen, keyboard, and printer operably connected to said personal computer;

said personal computer having an operating program recorded therein providing a set of instructions for sequential execution by the computer, such that when executing said instructions the computer displays an input screen on the display screen and then acquires, through input to the keyboard by an operator, input information received by the operator over the telephone comprising;

identification of a payer who has not previously authorized such drafts to payee, an account number identifying an account at a financial institution, an identification number identifying the financial institution, and an amount to be paid to said payee;

said operating program subsequently operating to format a draft on said financial account including an order for payment to the payee, and having said account number and said financial institution identification number located on said draft in a machine readable font according to automated check clearing house conventions, wherein said draft format is transferred to said printer by the operating program to generate a paper copy of said draft for deposit to the account of the payee.

13. 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 apparatus 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 payers 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 and identification of said financial institution holding said financial account;

output means for transferring said draft formats to a 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;

payee identifying means for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature; and

archival record storage and retrieval means for storing archival information describing past drafts produced by the apparatus for future reference in case of dispute.

14. 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 who has not previously authorized a draft generated by the apparatus, 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;

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 and identification of said financial institution holding said financial account;

output means for transferring said draft formats to a 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;

payee identifying means for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature; and

notification means for automatically generating and printing a written notice addressed to said payer, indicating that the draft will be generated and deposited as a draft against said payer'"'"'s account.

15. The apparatus of claim 14 wherein said notification means includes means for printing the amount and date of said draft in said written notice.

16. The apparatus of claim 14 further comprising:

an institutional database comprising financial institution identification information; and

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.

17. An automated debt collection 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 contemporaneously enters information specifying a new payer previously unknown to the apparatus and information specifying at least one postdated draft to be generated on an account of that payer at an agreed future date, said information including a financial institution identification number, payer account identifier, an amount to be drafted from said payer'"'"'s account, and a date for the transaction;

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 said date;

output means for transferring said draft formats to a 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;

payee identifying means for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature; and

scheduling means connected to said input means and said processing means for activating said output means to generate the draft.

18. The apparatus of claim 17 wherein said scheduling means comprises storage means for storing said postdated draft information and for recalling said information and activating said output means to generate the draft on said agreed date.

19. The apparatus of claim 17 further comprising notification means associated with said scheduling means for automatically generating and printing a written notice addressed to said payer indicating the said authorized future draft will be generated and deposited as a draft against said payer'"'"'s account.

20. The apparatus of claim 17 wherein said scheduling means schedules the generation of said drafts at periodic intervals until receiving a new instruction to cease scheduling said drafts at said regular intervals.

21. An automated apparatus for collecting a total debt by generating a plurality of authorized drafts on a financial accounts belonging to a debtor, 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 debtor previously unknown to the apparatus and a plurality of drafts to be generated on an account of that debtor, on dates specified by said debtor and having varying amounts specified by said debtor to complete a payment of said debt, the differing amounts of said drafts summing to equal said total debt, said information including a financial institution identification number, payer account identifier, an amount to be drafted from said payer'"'"'s account, and a date for each transaction;

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, each said draft format including identification of said financial account, identification of said financial institution holding said financial account, and said date;

output means for transferring said draft formats to a 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;

payee identifying means for providing payee identification information on the printed draft instructing that payment be made to the intended payee, and for providing a signatory block for an authorizing indicia other than said debtor'"'"'s signature; and

scheduling means connected to said input means and said processing means for activating said output means to generate the drafts on said dates specified by said debtor with the varying amounts specified by said debtor to complete a payment of said debt, the differing amounts of said drafts summing to equal said total debt.

22. The apparatus of claim 21 wherein said scheduling means includes storage means for storing information defining said drafts and for recalling said information and generating each said draft at a time near to its authorized date.

23. The apparatus of claim 21 further comprising notification means associated with said scheduling means for automatically generating a written notice to said debtor indicating that said drafts will be generated and deposited as drafts against said debtor'"'"'s account.

24. An automated distributed payment processing system for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payers, the drafts payable to a payee, comprising:

(1) a plurality of input stations, each including

(a) 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 specific 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, and

(b) transmission means for transferring said information to a central secure location remote from the input station;

(2) draft printing means provided in said central secure location remote from said plurality of input stations and connected to receive electronic data therefrom, for printing a draft on said financial account payable to said payee, said draft including identification of said financial account and identification of said financial institution holding said financial account printed using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment; and

(3) payee identifying means at the central secure location for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature.

25. The system of claim 24 wherein said transmission means comprises individual transmission means for transmitting information defining each draft from the input station to the central location upon collection of information for that draft.

26. The system of claim 24 wherein said input stations further comprise:

a local institutional database comprising financial institution identification information; and

institution verification means associated with said database 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.

27. The system of claim 24 wherein said transmission means comprises batch transmission means for transmitting information defining a plurality of drafts from the input station to the central location in a single grouped transmission.

28. The system of claim 27 further comprising means for generating said grouped transmission at the end of a business day.

29. The system of claim 24 wherein said input means provides a single input screen with fields for receiving a payer name, payer identifying information, financial institution identification number, payer account identifier, and the amount to be drafted from said payer'"'"'s account.

30. The system of claim 29 wherein said fields on said input screen are arranged with a placement corresponding generally to placement of said fields on the generated draft.

31. An automated distributed payment processing system for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payers, the drafts payable to a payee, comprising:

(1) a plurality of input stations, each including

(a) 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, and

(b) transmission means for transferring said information to a central secure location remote from the input station;

(2) draft printing means provided in said central secure location remote from said plurality of input stations and connected to receive electronic data therefrom, for printing a draft on said financial account payable to said payee, said draft including identification of said financial account and identification of said financial institution holding said financial account printed using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

(3) payee identifying means at the central secure location for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature; and

(4) central archival record storage and retrieval means associated with the draft printing means for storing archival information describing drafts produced by the printing means for future reference in case of dispute.

32. The system of claim 31 wherein said transmission means comprises individual transmission means for transmitting information defining each draft from the input station to the central location upon collection of information for that draft.

33. The system of claim 31 wherein said input stations further comprise:

a local institutional database comprising financial institution identification information; and

institution verification means associated with said database 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.

34. The system of claim 31 wherein said transmission means comprises batch transmission means for transmitting information defining a plurality of drafts from the input station to the central location in a single grouped transmission.

35. The system of claim 34 further comprising means for generating said grouped transmission at one or more predetermined times during a business day.

36. The system of claim 31 wherein said input means provides a single input screen with fields for receiving a payer name, payer identifying information, financial institution identification number, payer account identifier, and the amount to be drafted from said payer'"'"'s account.

37. The system of claim 36 wherein said fields on said input screen are arranged with a placement corresponding generally to placement of said fields on the generated draft.

38. An automated distributed payment processing system for generating a plurality of authorized drafts on financial accounts belonging to a plurality of payers, the drafts payable to a payee, comprising:

(1) a plurality of input stations, each including

(a) 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, and

(b) transmission means for transferring said information to a central secure location remote from the input station;

(2) a central draft processing system including;

(a) draft printing means provided in said central secure location remote from said plurality of input stations and connected to receive electronic data therefrom, for printing a draft on said financial account payable to said payee, said draft including identification of said financial account and identification of said financial institution holding said financial account printed using magnetically encoded ink and printing fonts compatible with clearing house check processing equipment;

(b) payee identifying means for providing payee identification information on the printed draft instructing that payment be made to the payee, and for providing a signatory block for an authorizing indicia other than said payer'"'"'s signature;

(c) central archival record storage and retrieval means associated with the draft printing means for storing archival information describing drafts produced by the printing means for future reference in case of dispute; and

(d) notification means for automatically generating and printing a written notice addressed to said payer that the draft will be generated and deposited as a draft against said payer'"'"'s account.

39. The system of claim 38 wherein said transmission means comprises individual transmission means for transmitting information defining each draft from the input station to the central location upon collection of information for that draft.

40. The system of claim 38 wherein said input stations further comprise:

a local institutional database comprising financial institution identification information; and

institution verification means associated with said database 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.

41. The system of claim 38 wherein said transmission means comprises batch transmission means for transmitting information defining a plurality of drafts from the input station to the central location in a single grouped transmission.

42. The system of claim 41 further comprising means for generating said grouped transmission at one or more predetermined times during a business day.

43. The system of claim 38 wherein said input means provides a single input screen with fields for receiving a payer name, payer identifying information, financial institution identification number, payer account identifier, and the amount to be drafted from said payer'"'"'s account.

44. The system of claim 43 wherein said fields on said input screen are arranged with a placement corresponding generally to placement of said fields on the generated draft.