OF COURSE IT'S LEGAL!
Check demand drafts, or "drafting" funds from a second party's checking account, have been a method of payment for more than 8 years.
Fax, E-Mail, and Telephone checks (pre-authorized paper bank drafts) are completely legal. It makes no more sense for a bank to refuse to honor a draft as to refuse any other check.
The primary requirement is that the checking account holder (your customer) must give you verbal, electronic, or written pre-authorization, such as faxing you their check. or clicking an authorization box on a web form. Once you've received pre-authorization, you don't need a signature on the paper-draft just as you don't need a signature on a phoned in credit card order.
Paper drafts are explicitly established as a legal method for payment as provided in: Uniform Commercial Code, Title 1, Section 1-201  and Title 3, Sections 3-104, 3-403, 2-403 Code of Federal Regulations, Title 12 Chapter II, Part 210 Regulation J, Federal Reserve Bank, Part 2, Sections 4a-201 to 4a-212.
The Federal Trade
Commission in late 1995 proposed rules that became law in January 1996
(Regulation 16CFR Part 310) that requires businesses who take checks over the
phone to have a "verification" procedure in place.
IT'S LEGAL IN CANADA TOO!
Any one of the following gives Proper "verification" ...
In actual practice, this
verification will never be needed unless your customer later claims that no
authorization was given. I have never had this happen to me, and I don't think
you will if your dealings are honest. It doesn't seem to be much of an issue
with small checks. The larger your check amounts, the more you may want to
religiously follow a verification procedure.
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