(a) No person, firm, orcorporation engaged in lending money shall deliver to a person an unsolicitedcheck made out to the recipient that upon cashing, obligates the recipient torepay the amount of the check plus interest and fees, unless all of thefollowing requirements are satisfied:
(1) In addition to anydisclosures otherwise required by law, the solicitation for loans using afacsimile or negotiable check shall disclose both of the following on the face ofthe check:
a. In at least 10‑pointboldface type a statement in substantially the following form: "THIS IS ASOLICITATION FOR A LOAN. READ THE ATTACHED DISCLOSURES BEFORE SIGNING THISAGREEMENT."
b. In at least 6‑pointtype a statement in substantially the following form: "By endorsing theback of this check, you accept our offer and agree to the terms of your loanagreement contained in the disclosure statement attached to this check."
(2) Notification of theloan agreement being activated by endorsement must be conspicuously printed inat least 6‑point type on the back of the check in substantially thefollowing form: "By endorsing this check, you agree to repay this loanaccording to the terms of the attached loan agreement."
(3) The check isattached to a disclosure statement that is detachable and that contains in atleast 10‑point boldface type a statement conspicuously placed insubstantially the following form: "This is a loan solicitation. If youcash this check, you are agreeing to borrow the sum of $____ at the ____ % rateof interest for a period of ____ months. Your monthly payments will be $____for ____ months. If you are late with a payment, you will be charged thefollowing fees in addition to your monthly payment: (list fees). All other termsof this loan are clearly identified as loan terms and appear on the back of thecheck or on this attachment. Read these terms carefully before you cash thischeck. Cashing this check constitutes a loan transaction. You may cancel thisloan by returning the amount of the check to the lender within 10 days of thedate this check is cashed. You may prepay this loan agreement at anytimewithout penalty. READ THE AGREEMENT BEFORE SIGNING."
(4) The recipient has aright to cancel the loan by refunding to the lender the amount of the checkwithin 10 days of the date the check is cashed. The loan is deemed refundedwhen a refund of the amount of the check is received by the lender within 10days of the date the check is cashed.
(b) In the event anunsolicited check is stolen or otherwise obtained by someone other than theintended payee, and the check is cashed fraudulently or without authorizationfrom the payee, the lender who issued the check shall provide the followingrecourse to the intended payee:
(1) The lender, uponreceipt of notification that intended payee did not negotiate the check, shallpromptly provide the intended payee with a statement or affidavit to be signedby the intended payee confirming that the intended payee did not deposit orcash the check or receive the proceeds of the check. The lender shall alsoprovide the intended payee with the name and telephone number of a contactperson designated by the lender to provide assistance to intended payees whohave been victimized by the fraudulent negotiation of unsolicited checks. Thelender shall cease all collection activity against the intended payee until thelender completes an investigation into the transaction.
(2) The intended payeeshall be directed to complete and return the confirmation statement to thelender or an affiliate of the lender.
(3) Within 30 days ofthe receipt of the confirmation statement, the lender shall conduct areasonable investigation and determine whether the check was fraudulentlynegotiated. Absent evidence to the contrary, the presumption shall be that theconfirmation statement submitted by the intended payee is accurate. The lendershall notify the intended payee in writing of the results of the investigation.If it is determined that the check was cashed fraudulently, the lender shalltake immediate action to remove the intended payee from all liability on theaccount and to request all credit reporting agencies to remove references tothe transaction, if any, from the consumer's credit reports.
(4) A consumer who is anintended payee of an unsolicited check under this section may bring a civilaction to recover damages, costs, and attorney fees for any violation of thissubsection.
(c) The provisions ofthis section shall not apply to a transaction in which a consumer has submittedan application or requested an extension of credit from the lender beforereceiving the check or instrument, or where the lender has an existing accountrelationship with the consumer.
(d) A violation of thissection is an unfair trade practice under G.S. 75‑1.1 and is subject toall of the enforcement and penalty provisions of an unfair trade practice underthis Article. (2001‑391,s. 1.)
(a) No person, firm, orcorporation engaged in lending money shall deliver to a person an unsolicitedcheck made out to the recipient that upon cashing, obligates the recipient torepay the amount of the check plus interest and fees, unless all of thefollowing requirements are satisfied:
(1) In addition to anydisclosures otherwise required by law, the solicitation for loans using afacsimile or negotiable check shall disclose both of the following on the face ofthe check:
a. In at least 10‑pointboldface type a statement in substantially the following form: "THIS IS ASOLICITATION FOR A LOAN. READ THE ATTACHED DISCLOSURES BEFORE SIGNING THISAGREEMENT."
b. In at least 6‑pointtype a statement in substantially the following form: "By endorsing theback of this check, you accept our offer and agree to the terms of your loanagreement contained in the disclosure statement attached to this check."
(2) Notification of theloan agreement being activated by endorsement must be conspicuously printed inat least 6‑point type on the back of the check in substantially thefollowing form: "By endorsing this check, you agree to repay this loanaccording to the terms of the attached loan agreement."
(3) The check isattached to a disclosure statement that is detachable and that contains in atleast 10‑point boldface type a statement conspicuously placed insubstantially the following form: "This is a loan solicitation. If youcash this check, you are agreeing to borrow the sum of $____ at the ____ % rateof interest for a period of ____ months. Your monthly payments will be $____for ____ months. If you are late with a payment, you will be charged thefollowing fees in addition to your monthly payment: (list fees). All other termsof this loan are clearly identified as loan terms and appear on the back of thecheck or on this attachment. Read these terms carefully before you cash thischeck. Cashing this check constitutes a loan transaction. You may cancel thisloan by returning the amount of the check to the lender within 10 days of thedate this check is cashed. You may prepay this loan agreement at anytimewithout penalty. READ THE AGREEMENT BEFORE SIGNING."
(4) The recipient has aright to cancel the loan by refunding to the lender the amount of the checkwithin 10 days of the date the check is cashed. The loan is deemed refundedwhen a refund of the amount of the check is received by the lender within 10days of the date the check is cashed.
(b) In the event anunsolicited check is stolen or otherwise obtained by someone other than theintended payee, and the check is cashed fraudulently or without authorizationfrom the payee, the lender who issued the check shall provide the followingrecourse to the intended payee:
(1) The lender, uponreceipt of notification that intended payee did not negotiate the check, shallpromptly provide the intended payee with a statement or affidavit to be signedby the intended payee confirming that the intended payee did not deposit orcash the check or receive the proceeds of the check. The lender shall alsoprovide the intended payee with the name and telephone number of a contactperson designated by the lender to provide assistance to intended payees whohave been victimized by the fraudulent negotiation of unsolicited checks. Thelender shall cease all collection activity against the intended payee until thelender completes an investigation into the transaction.
(2) The intended payeeshall be directed to complete and return the confirmation statement to thelender or an affiliate of the lender.
(3) Within 30 days ofthe receipt of the confirmation statement, the lender shall conduct areasonable investigation and determine whether the check was fraudulentlynegotiated. Absent evidence to the contrary, the presumption shall be that theconfirmation statement submitted by the intended payee is accurate. The lendershall notify the intended payee in writing of the results of the investigation.If it is determined that the check was cashed fraudulently, the lender shalltake immediate action to remove the intended payee from all liability on theaccount and to request all credit reporting agencies to remove references tothe transaction, if any, from the consumer's credit reports.
(4) A consumer who is anintended payee of an unsolicited check under this section may bring a civilaction to recover damages, costs, and attorney fees for any violation of thissubsection.
(c) The provisions ofthis section shall not apply to a transaction in which a consumer has submittedan application or requested an extension of credit from the lender beforereceiving the check or instrument, or where the lender has an existing accountrelationship with the consumer.
(d) A violation of thissection is an unfair trade practice under G.S. 75‑1.1 and is subject toall of the enforcement and penalty provisions of an unfair trade practice underthis Article. (2001‑391,s. 1.)
(a) No person, firm, orcorporation engaged in lending money shall deliver to a person an unsolicitedcheck made out to the recipient that upon cashing, obligates the recipient torepay the amount of the check plus interest and fees, unless all of thefollowing requirements are satisfied:
(1) In addition to anydisclosures otherwise required by law, the solicitation for loans using afacsimile or negotiable check shall disclose both of the following on the face ofthe check:
a. In at least 10‑pointboldface type a statement in substantially the following form: "THIS IS ASOLICITATION FOR A LOAN. READ THE ATTACHED DISCLOSURES BEFORE SIGNING THISAGREEMENT."
b. In at least 6‑pointtype a statement in substantially the following form: "By endorsing theback of this check, you accept our offer and agree to the terms of your loanagreement contained in the disclosure statement attached to this check."
(2) Notification of theloan agreement being activated by endorsement must be conspicuously printed inat least 6‑point type on the back of the check in substantially thefollowing form: "By endorsing this check, you agree to repay this loanaccording to the terms of the attached loan agreement."
(3) The check isattached to a disclosure statement that is detachable and that contains in atleast 10‑point boldface type a statement conspicuously placed insubstantially the following form: "This is a loan solicitation. If youcash this check, you are agreeing to borrow the sum of $____ at the ____ % rateof interest for a period of ____ months. Your monthly payments will be $____for ____ months. If you are late with a payment, you will be charged thefollowing fees in addition to your monthly payment: (list fees). All other termsof this loan are clearly identified as loan terms and appear on the back of thecheck or on this attachment. Read these terms carefully before you cash thischeck. Cashing this check constitutes a loan transaction. You may cancel thisloan by returning the amount of the check to the lender within 10 days of thedate this check is cashed. You may prepay this loan agreement at anytimewithout penalty. READ THE AGREEMENT BEFORE SIGNING."
(4) The recipient has aright to cancel the loan by refunding to the lender the amount of the checkwithin 10 days of the date the check is cashed. The loan is deemed refundedwhen a refund of the amount of the check is received by the lender within 10days of the date the check is cashed.
(b) In the event anunsolicited check is stolen or otherwise obtained by someone other than theintended payee, and the check is cashed fraudulently or without authorizationfrom the payee, the lender who issued the check shall provide the followingrecourse to the intended payee:
(1) The lender, uponreceipt of notification that intended payee did not negotiate the check, shallpromptly provide the intended payee with a statement or affidavit to be signedby the intended payee confirming that the intended payee did not deposit orcash the check or receive the proceeds of the check. The lender shall alsoprovide the intended payee with the name and telephone number of a contactperson designated by the lender to provide assistance to intended payees whohave been victimized by the fraudulent negotiation of unsolicited checks. Thelender shall cease all collection activity against the intended payee until thelender completes an investigation into the transaction.
(2) The intended payeeshall be directed to complete and return the confirmation statement to thelender or an affiliate of the lender.
(3) Within 30 days ofthe receipt of the confirmation statement, the lender shall conduct areasonable investigation and determine whether the check was fraudulentlynegotiated. Absent evidence to the contrary, the presumption shall be that theconfirmation statement submitted by the intended payee is accurate. The lendershall notify the intended payee in writing of the results of the investigation.If it is determined that the check was cashed fraudulently, the lender shalltake immediate action to remove the intended payee from all liability on theaccount and to request all credit reporting agencies to remove references tothe transaction, if any, from the consumer's credit reports.
(4) A consumer who is anintended payee of an unsolicited check under this section may bring a civilaction to recover damages, costs, and attorney fees for any violation of thissubsection.
(c) The provisions ofthis section shall not apply to a transaction in which a consumer has submittedan application or requested an extension of credit from the lender beforereceiving the check or instrument, or where the lender has an existing accountrelationship with the consumer.
(d) A violation of thissection is an unfair trade practice under G.S. 75‑1.1 and is subject toall of the enforcement and penalty provisions of an unfair trade practice underthis Article. (2001‑391,s. 1.)
