Mistakes happen. Sometimes there are filings made in error with incorrect information or data. But other times, filings are made that are not accurate at all and were filed without permission of the parties involved. This can have severe repercussions if not dealt with accordingly and in due time. But what can be done to remove an unauthorized UCC filing? This article will help you understand what steps you can take to protect your financial institution.
What are unauthorized filings?
An unauthorized filing refers to a filing that is made without consent, warning, or factual basis. These filings can be made when someone has access to information about a business and can allege that they have a secured interest in collateral. If they have a business name, they can file a Uniform Commercial Code (UCC) financing statement and claim legitimacy over a business.
Unauthorized filings happen for several reasons. They can be filed to damage a debtor’s reputation as the filings are publicly available. It can be done to harass a person or an institution and cause them harm. It can even be used to complicate or prevent secured financing, which can seriously damage a business.
The filing office cannot remove an unauthorized filing
You might be wondering how to remove a UCC filing from your filing office. The first thing to remember is that the filing office cannot help you. They have a specific role of indexing UCC records and making those records available to people requesting the records. They cannot tell you whether a filing is authorized or unauthorized, whether it was filed by mistake, or what the record means. The office is not authorized to remove records from the index based only upon an assertion that a record is mistaken, fraudulent, or in error.
Provisions for removing an unauthorized filing
If you are wondering how to get a UCC filing removed, there are a few provisions that you can take into consideration to make your claim:
- Demand for Accounting/Termination (9-210): This section provides that a debtor may request three types of information from a secured party. The three types of information available to the debtor are: 1) a request for an accounting; 2) a request regarding a list of collateral; and 3) a request regarding a statement of account. A secured party receiving such a request generally must comply with the request within 14 days of receipt.
- Correction Statement (UCC-5) (9-518): Over the years, this form has been filed most frequently by secured parties as a means of providing notice when a mistake has been made. It is important to note that filing a UCC-5 has no legal effect; it is merely a method for providing additional information to searchers.
- Penalties (9-625): This sets forth various penalties for non-compliance with Article 9. It leaves the person who filed the unauthorized UCC liable for damages and losses.
How can you dispute a UCC filing?
You must dispute your filing using one of the above methods and take legal action to protect your interests. This will allow you to remedy the situation and ensure that the right party is liable for damages, and you can get recourse for the interests that have been compromised.
If that process seems daunting to perform on your own, consider partnering with Lien Solutions. Lien Solutions processes more filings than any other provider in the nation. We have the expertise to assist you in any jurisdiction that needs assistance. Reach out to one of our experts today.
