From Collector: Satisfaction Denied

How to deal with consumer checks stating the account is “paid in full.”

6/12/2018 8:00 AM

Collector MagazineNewsCompliance
From Collector: Satisfaction Denied

You’ve heard the rumor, but is it really true that a consumer can write “paid in full” or some other related phrase on a check, and actually satisfy the debt for a lesser amount if the check is cashed? The short answer is yes—but the longer answer is bit more complicated, ACA International Compliance Analyst Laura Dadd writes in the May issue of Collector magazine.

Debt collectors who process checks must be aware of how to handle a consumer’s check stating “paid in full” or a letter along with the check stating the same.

When a check with this declaration is received and cashed, in certain conditions this can satisfy the debt. This situation is known legally as accord and satisfaction.

This helpful article includes an overview of how to recognize an accord and satisfaction scenario, how to handle such checks and how to establish safe harbor protections.

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