Also known as "remotely created checks".
Demand drafts were originally designed to benefit legitimate telemarketers who needed to withdraw funds from customer checking accounts. However, the lack of a signature required to authorize the transfers have left demand drafts open to fraudulent use. The only information needed to create a demand draft is a bank account number and a bank routing number - this information is found on a standard check.
In 2005, the Federal Reserve proposed new regulations over the fraudulent use of demand drafts. The regulation increases a victim's ability to claim a refund and makes banks more accountable for cashing fraudulent checks.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Demand draft — A demand draft A demand draft, also known as a remotely created check, a tele check, or check by phone, check by fax or echeck, is a check created by a merchant with a buyer s checking account number on it, but without the buyer s original… … Wikipedia
demand draft — Synonyms and related words: CD, IOU, MO, acceptance, acceptance bill, bank acceptance, bank check, bill, bill of draft, bill of exchange, blank check, certificate, certificate of deposit, certified check, check, checkbook, cheque, commercial… … Moby Thesaurus
demand draft — /dɪ mɑ:nd drɑ:ft/ noun a draft which is to be paid immediately … Dictionary of banking and finance
demand draft — noun see demand bill … Useful english dictionary
draft — Synonyms and related words: CD, IOU, MO, abbreviation, abbreviature, abrege, abridgment, abstract, acceptance, acceptance bill, adumbrate, air current, arrangement, article, attraction, autograph, bag, bang, bank acceptance, bank check, beverage … Moby Thesaurus
demand — I v. To claim as one s due; to require; to ask relief. To summon; to call in court II n. The assertion of a legal right; a legal obligation asserted in the courts. An imperative request preferred by one person to another, under a claim of right,… … Black's law dictionary
demand bill — noun or demand draft : sight draft * * * a bill payable upon presentation. * * * demand bill, a bill of exchange payable on demand … Useful english dictionary
demand note — A promissory note that calls for principal to be payable on demand. In recent years, courts have significantly restricted the circumstances under which a bank could make and enforce a demand for repayment under a demand note. American Banker… … Financial and business terms
demand bill — /dəˈmænd bɪl/ (say duh mand bil) noun a bill of exchange, note, etc., payable on demand or presentation. Also, demand draft, demand note … Australian English dictionary
draft — 1 n 1: a preliminary version of something (as a law) 2 a: a system for or act of selecting individuals from a group (as for military service) b: the act or process of selecting an individual (as for political candidacy) without his or her… … Law dictionary