Remotely created checks are orders of payment created by the payee and authorized by the customer remotely, using a telephone or the Internet by providing the required information including the MICR code from a valid check.
[1] Demand drafts are frequently used by consumers instead of credit cards, and large companies also commonly use them.
[2] Demand drafts are also a popular method for lending institutions to attempt to collect on overdue loans.
[7] Demand draft fraud can be frustrating for consumers, because unlike credit card or ACH disputes, consumers are not often given any funds back until after investigation finds that the draft was unauthorized.
[citation needed] Unlike ACH transactions that are governed by NACHA regulations,[10] check drafting allows outbound telemarketers to accept these types of phone payments if they comply with the FTC Regulations 16 CFR 310 in regard to proper record keeping.