Question

When you put "Payment in Full" on a check, doesn't that signify that you can't be bothered for more money?

I have a friend who is in a situation. She told me that she recently had a problem with yellow pages in regards to posting her business. The "contract" was an oral contract over the phone. For some negligent reasons on the company's part, my friend called and asked to end the contract and what penalties would follow for doing so. The person on the other end said there would be no penalties as long as she paid for the time that she agreed to (3 months). Even though she was bothered by it, my friend did so and canceled the contract. My friend (did an electronic fund withdrawl) wrote a check with the statement "paid in full" to the left of her "signature". Then, in her checkbook she wrote the balance after she spoke with the representative. A long time passed and they never deducted. I told her to call them up and have them send her a verification that they did take the bill amount from the checking account. She was never able to speak with a representative and let it go. 8 months later, yellowpages sends her a bill for $127.30 saying that collection was not paid and that they had a collection agency that would handle the matter. I've advised her at this point to seek legal advice but would there be any form of measure we can do to avoid an attorney? Common sense tells me they should have sent her a "receipt" to finalize her contract. Are things like over-the-phone contracts more susceptible to loophools that my friend wasn't aware of? Help! I thought when you placed, "paid in full" that if there was any discrepancy, then the company would have intervened in a more timely manner than 8 months.

5 years ago - 7 answers

Best Answer

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As mentioned this is a common myth. All the creditor (or collection agency) has to do is to insert the following on the reverse side of the check:

This check is deposited under protest, without prejudice, and with preservation of all rights of the payee against the drawer of this check pursuant to UCC § 1-207.

This leaves them the legal wiggle room to collect the full amount under U.C.C. - ARTICLE 1- GENERAL PROVISIONS: § 1-207. Performance or Acceptance Under Reservation of Rights.
(1) A party who with explicit reservation of rights performs or promises performance or assents to performance in a manner demanded or offered by the other party does not thereby prejudice the rights reserved. Such words as "without prejudice", "under protest" or the like are sufficient.

She should have obtained a written agreement from the beginning as there is no documented proof as to the cancellation. Since they have not cashed the check she doesn't even have a copy of the check for proof of payment. She can however ask her bank for some form of proof of the electronic transfer payment if she specified who the payee was and the amount paid. She should file a complaint with the FTC (use this link: www.ftccomplaintassistant.gov/

Have her also file a complaint with her states attorney generals office.

Hope this helps answer your question.

Source(s):

5 years ago

Other Answers

No. That "paid in full" thing is a myth. No comment you put on your check overrides a valid debt.

by bud68 - 5 years ago

Any promise made over the phone that is not backed up in writing is worthless. The problem is that whoever endorses the check will simply mark out the "Payment in Full" notation..

by CatDad - 5 years ago

First off never do an oral contract over the phone. Get it in writting and then decide. Good luck on the attorney.

by Happy2bAlive - 5 years ago

"Your friend" should be able to have her bank/credit union verify the funds withdrawal. If she wrote a check on the account the money went into, the institution should be able to verify whether or not that check was ever cashed.
One should NEVER send a check without some sort of independent verification of it's being mailed...and you can only do that with registered mail. If she sent a postal money order, or any other type of money order (other than a personal check), she should have kept her copy of the duplicate or "carbon copy" of said check.
The lawyer would cost more than the amount yellowpages is demanding. She would find it easier and CHEAPER just to send them another check - making SURE she can PROVE she mailed the check!
Why cheaper? Because this will DESTROY her credit rating! Even if she pays the extra $127.30, their having to send it to collections will degrade her credit rating seriously.
Finance is a pain in the rear hole - but people MUST learn how to cover their rear ends! It's just too bad many folks have to learn the hard way.
She did nothing criminal - but she's screwed anyway. Rotten luck, eh?

by Billy M - 5 years ago

Sounds like they didn't like the "Paid in full" words on the check (in the future, place this info on the back where they would endorse the check) and opted not to negotiate it. They don't have to accept a check with this type of provision as cashing it would imply acceptance of the terms. I'd pay the bill and be done with it, especially since she knew the money was not taken from her account and "let it go" for 8 months.

by Mark J - 5 years ago

that means zero ..zippo..nada...nothing

by Roger M - 5 years ago