HomeMy WebLinkAboutContract 1550 CHECKRITE RECOVERY SERVICES, INC.
CHECK RECOVERY SERVICES AGREEMENT
7050 Union Park Center • Suite 200 • Midvale, Utah • 84047
Subject to the terms and conditions of this Service Agreement and Schedule A, please enter my order for the services of CheckRite Recovery Services, Inc. ( "CheckRite ")
described herein ( "Services ") for an initial term of one (1) year.
1. CHECKRITE SERVICES. According to the terms of this Agreement and Schedule A, CheckRite will furnish Merchant with the Services described herein.
a) Merchant authorizes CheckRite to pursue recovery of all checks referred to CheckRite by Merchant, and CheckRite hereby agrees to attempt to recover all referred
checks through CheckRite's normal recovery procedures.
b) CheckRite agrees to remit to Merchant payment(s) received on checks successfully recovered. Merchant understands and CheckRite agrees that the intent of
CheckRite, upon successful collection, is to remit the face value of all checks, less any commissions due, directly to the Merchant.
2. LEGAL PROCESSING. Merchant agrees that CheckRite may select the attorney to handle any litigation on behalf of Merchant for the collection of each check assigned,
and make all fee arrangements between CheckRite and the attorney, provided those arrangements are without any up -front cost to Merchant. Suit shall be commenced
either in the name of CheckRite or in Merchant's name. If suit is commenced in Merchant's name, the Attorney shall be regarded as Merchant's attorney. Merchant
acknowledges that once legal processing has begun, CheckRite will have advanced legal fees and court costs. Merchant agrees that if, after legal processing has begun,
Merchant accepts direct payment or requests that legal action be discontinued, Merchant will become liable to and be required to reimburse CheckRite for those fees and
costs that CheckRite and its attorney have incurred.
3. FEES. Merchant shall pay a Set -Up Fee in the amount as per Schedule A with the submission of this Agreement. Thereafter, merchant shall pay:
a) A commission on all checks successfully recovered, and such commission shall be based on the age of the dishonored check when received by CheckRite for
processing, as per commission schedule in Schedule A;
b) An Inventory Report fee to be paid each month as per Schedule A;
c) An annual Postage and Handling fee as per Schedule A; and
d) An annual Legal Processing fee as per Schedule A.
In addition, Merchant shall pay all taxes (local, state and federal) and other charges incurred by CheckRite which may now or hereafter be imposed or levied upon the
purchase, sale, lease, ownership, possession, use or control of the equipment or Services. Merchant shall promptly pay (or reimburse CheckRite for payment of) all such
taxes upon receipt from CheckRite of an invoice therefore.
Merchant hereby authorizes CheckRite to debit Merchant's business checking account for the fees set forth above and in Schedule A. Merchant agrees to provide a voided
business check to CheckRite to allow for proper coding of bank transit number and direct deposit account number. Merchant warrants that its business checking account is
held by a financial institution which is a member of the Automated Clearing House (ACH) network.
If CheckRite is unable to collect applicable fees from the business checking account or unable to deduct the amount from collected checks referenced above, Merchant
agrees to pay a one and one -half percent (1 ''/2 %) per month service charge on all such fees that are not paid within thirty (30) days following receipt of any notice.
Merchant agrees to reimburse CheckRite for all costs and expenses, including reasonable attorney fees, incurred by CheckRite in enforcing or defending this Agreement or
actions taken pursuant to this Agreement including, but not limited to, the collection of any monies due CheckRite under this Agreement.
In the case of non- payment of applicable fees, Merchant authorizes CheckRite to deduct from its remittance any amounts due CheckRite. All commissions due CheckRite
shall be deducted by CheckRite from amounts collected on behalf of Merchant before remittance of same to Merchant.
4. TERM AND TERMINATION. This Agreement shall remain in full force and effect for an initial term of one (1) year, beginning upon the date CheckRite executes the
Agreement, and shall be automatically extended for successive one (1) year periods on the same terms and conditions expressed herein, or as may be amended, unless
either party gives the other party written notice of termination at least (30) days prior to the expiration of the initial term or any extension or renewals thereof or unless this
Agreement is otherwise terminated as provided for herein. Immediately upon notice of termination by either party, Merchant will return to CheckRite all CheckRite forms,
equipment (if applicable), decals, and other supplies furnished by CheckRite to Merchant. Merchant acknowledges that CheckRite will have invested labor, postage,
collection forms, and other valuable consideration on each check processed, and that CheckRite agrees to process to conclusion all checks received prior to termination. If
Merchant elects to withdraw the checks from the collection process. Merchant shall pay CheckRite $10.00 for each check withdrawn. Checks withdrawn from legal
processing shall be subject to a higher fee not to exceed $150.00 per check.
5. USE OF THE SERVICES AND CHECK PROCESSING. Merchant agrees to follow all of the published instructions provided to Merchant by CheckRite from time to
time. Merchant shall process all checks by forwarding to CheckRite;
a) The original of any check that has been dishonored by the Customer's financial institution (no photocopies accepted).
6. ASSIGNMENT OF CHECKS. Merchant shall assign to CheckRite, without recourse, all of Merchant's right, title and interest in the check, including any rights to treble
or punitive damages permitted under applicable law and including the entire amount of the check. Merchant shall execute and deliver endorsement, instruments and papers
and shall do whatever is necessary to secure and defend those rights and shall do nothing to prejudice those rights. Merchant shall cooperate with CheckRite in its pursuit
of those rights, including suing or prosecution of the Customer under all applicable laws.
7. NOTIFICATION OF PAYMENTS RECEIVED. Merchant shall notify CheckRite's Customer Service Department immediately by telephone of any payment received
directly on a check that has been assigned to CheckRite. Said notification shall include the customer's identity.
8. SERVICE CHARGE NOTICE. Merchant shall display CheckRite's service charge notice to Customers at each location in a prominent and conspicuous place to ensure
that each customer has seen such notice. Merchant agrees to pay Checkrite a fee equal to the amount of the service charges recovered, whether recovered by Merchant or
by CheckRite.
9. CONFIDENTIALITY. Merchant hereby authorizes CheckRite to include checking account information obtained from checks referred to CheckRite by Merchant as part
of the CheckRite data base. Merchant agrees and certifies that any information derived from access to the database shall he used only for check verification purposes.
Merchant, its employees and agents, shall treat as confidential all information that conies to its attention in the performance of its duties under this Agreement and shall
utilize such information only for the duties and obligations contained herein. Merchant hereby agrees to indemnify and hold CheckRite harmless from any liabilities
arising out of the misuse of CheckRite information (including, but not limited to, any information contained in the database) by Merchant and /or Merchant employees.
10. LIMITATION OF LIABILITY AND INDEMNIFICATION. Neither CheckRite (nor its parents, affiliates or subsidiaries) shall be liable for failure to provide the
Services if such failure is due to any cause or condition beyond its reasonable control. Such causes or conditions shall include but shall not be limited to acts of God or of
the public enemy, acts of the Government in either its sovereign or contractual capacity, tires, floods, epidemics, quarantine restrictions, strikes, shortages of labor or
materials, freight embargoes, unusually severe weather, electrical power failures, unavoidable delays, telecommunication failures, or other causes beyond CheckRite's
control and neither CheckRite (nor its parents, affiliates or subsidiaries) shall have liability for losses, expenses or damages, ordinary, special or consequential, resulting
directly or indirectly from such causes.
CheckRite agrees to use commercially reasonable efforts at all times to provide prompt and efficient services; however, CheckRite makes no warranties or representations
regarding the Services except as specifically stated in this Section 8. CheckRite shall use due care in providing the Services hereunder, CheckRite shall not be responsible
in any manner for errors or failures of any party other than those of CheckRite. This warranty is exclusive and is in lieu of all other warranties, and Merchant hereby
waives all other warranties express, implied or statutory, including but not limited to, any warranty of merchantability or fitness for use for a particular purpose.
Should there be any failure in performance or errors or omissions with respect to the Services, liability of CheckRite (including its parents, affiliates and subsidiaries) shall
be limited to using commercially reasonable efforts to correct such failure in performance or errors or omissions. In no event, except set forth herein, shall CheckRite or its
parents, affiliates and subsidiaries be liable to Merchant or any third parties (including Merchant's customers) for any claim, loss or damage, ordinary, special or
consequential, or otherwise, even if CheckRite has been advised of the possibility of such damage.
Due to the nature of the services being performed by CheckRite, it is agreed that in no event will CheckRite (including its parents, affiliates and subsidiaries) be liable for
any claim, loss, liability, correction, cost, damage or expense caused by CheckRite's performance or failure to perform hereunder which is riot reported by Merchant within
thirty (30) days of such failure to perfonn or, in the event of a billing error, within sixty (60) days of the earlier of (1) the date of the debit from Merchant's account, or (2)
the date of invoice. CR.RECOVERY 01 -8/99
Merchant shall indemnify and hold CheckRite (including its parents, affiliates and subsidiaries) harmless from and against any and all liabilities, losses, damages, disputes,
offsets, claims, counterclaims or expenses asserted against CheckRite by any customer of Merchant or other party with regard to any check written to Merchant or to any
Service provided hereunder or as a result of any breach of this Agreement by Merchant.
Liability of CheckRite (including its parents, affiliates and subsidiaries) in any and all categories and for any and all causes arising out of this Agreement shall, in the
aggregate, not exceed one (I) month's average billing to Merchant taken over the twelve (12) months preceding the month in which the damage or injury is alleged to have
occurred, but if this Agreement has not been in effect for twelve (12) months preceding such date, then over such fewer number of preceding months that this Agreement
has been in effect.
11. RECOVERY IN EXCESS OF FACE VALUE. All recovery over the face value of the check(s), including service charges, attorney fees, court costs and damages,
whether court- awarded or by settlement, shall be retained by CheckRite or its designated attorney.
12. ADVERTISING. Merchant shall use its best efforts to advertise the services provided by CheckRite, including CheckRite's trade name and logo in a form provided by
CheckRite, with equal prominence to the displays of trade names or logos of any other payment media.
13. RESOLUTION AND CONFLICTS. CheckRite reserves the right to terminate this Agreement at any time upon written notice to Merchant. CheckRite shall have the
right to offset amounts due Merchants for recovered checks against any amounts due CheckRite. CheckRite's continuation of performance thereafter shall not constitute a
waiver of any of CheckRite's rights under this Agreement and the rights contained in this paragraph shall be in addition to any other remedies at law or equity.
14. NOTICES. Except as otherwise provided in this Agreement, any notice required or given under this Agreement shall be in writing and shall be deemed validly given
twenty-four (24) hours after deposit in the first -class U.S. Postal Service mail, postage prepaid; or, if by other means of notification, upon actual receipt of delivery. All
notices shall be addressed and delivered to the appropriate party at the following offices: President, CheckRite, 7050 Union Park Center, Suite 200, Midvale, UT 84047 and
Corporate Secretary, CheckRite, Two National Data Plaza, Atlanta, GA 30329 -2010. CheckRite shall mail any notice in accordance with this paragraph to the address
found in the "Merchant Information" section of this same Agreement.
15. MODIFICATIONS. This Agreement may be amended only in writing signed by CheckRite and Merchant, except that (a) any published instructions regarding the
Services may be changed upon ten (10) days written notice to Merchant or (b) CheckRite may mail to Merchant, at least ten (10) days in advance, either a notice describing
amendments to this Agreement or an entirely new Agreement, which amendment or new agreement will be binding upon Merchant if it submits a check for recovery after
the effective date of such amendment or new agreement as set forth in CheckRite's notice.
16. MISCELLANEOUS.
a) Neither party to this Agreement may assign its rights or obligations under this Agreement without the express written consent of the other party, except that the
obligations of CheckRite under this Agreement may be assigned, provided or fulfilled by any parent, subsidiary, affiliate, successor -in- interest, or subcontractor of
CheckRite. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns.
b) This Agreement shall be construed and interpreted in accordance with the laws of the State of Georgia, without regard to its conflicts of law provisions.
c) This Agreement, Schedule A and others published instructions shall constitute the entire understanding between the parties and any other prior negotiations or prior
agreements shall be considered a nullity.
d) If any term, covenant or provision of this Agreement, or the application thereof to any person or circumstance, shall to any extent be held by a court of competent
jurisdiction to be invalid or unenforceable, the remainder of the terms of this Agreement shall remain in full force and effect and shall in no way be affected or
invalidated.
e) The parties, wishing to afford this Agreement maximum applicability to their relationship, therefore, agree to uphold its terms in any state where the same may be
enforced.
t) CheckRite's failure to enforce or failure to insist upon strict compliance of any term of this Agreement shall not constitute a waiver of that term and shall not
constitute a waiver of any other provisions of the Agreement.
g) Whenever appropriate, as used herein, the singular denotes the plural and the masculine denotes the feminine.
h) CheckRite assumes no responsibility for goods or services not covered by this Agreement.
17. SERVICE OPTIONS. Notwithstanding the above provisions of this Agreement, CheckRite agrees to provide or acknowledge of the following options as checked below.
a) REFERRED CHECKS. Sent to Checkrite for normal recovery procedures via; Bank Forwarding ❑ US Mail or Delivery Service
b) ACKNOWLEDGMENTS. Reports shall be sent to Merchant by;t3 Mail ❑ Fax. Fax #;
c) REMITTANCES. On a monthly basis remittances will be Mailed to Merchants ❑ Deposited Electronically (ACH) to Merchant's Business Account.
d) RECOVERY SERVICES. Checks referred for recovery services include; Pre- existing Checksb Future Check' Nen- Compliance Guarantee Checks
e) INVENTORY REPORTS. p Yes, 1 elect to receive monthly inventory reports. I understand 1 will be billecbthc apps priate amount for the type of re • I • I choose.
❑ Current Month: $5.00 LI Year to Date: $8.00 _7y 14 c C�y( il!t 1:&-- 10°
CHECKRITE R E Y SERVICES, INC. MERCHANT
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Printed Name 1 Printed Name. _ -
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Title � �� � Date 9- O Tit ty Manager /Mayor Date 10 -10 -2000
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Schedule A
Merchant Number Postage and Handling Legal Processing Inventory Report Set -Up Fee
(Annual Fee) (Annual Fee) (Monthly Fee)
$ 25.00 $ 21. P $ 8,00 $46_
(Commission Schedule)
Corporate Name
City o f Columbia H e i g h t s Q% of the face amount of checks received within or upon 30 days from date of check.
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r0 % of the face amount of checks received more than 30 days from the date of check.
DBA
1•AX CON I'RAC I TO 1 - 800 - 670 - 6301
Address 590 40th Avenue N,E..
cit Columbia Heights state MN zip 55421 Rep Name: ■V
Rep Number: yi •
Contact Name(s) Bill E 1 ri to Pre - Existing Check Acknowledgement
Phone #: (763)706-3626 Fax #: ( ) 706 -3626 763 706 -3637 Number of Checks: Amount of Checks:
If Remittance Cheeks and Slalemeaa nature a different erent mailing address, please lndicale below Special Instructions:
Mailing Address
City State Zip
Type of Business SIC: Zip CR.RECOVERY 01-8/99
CITY COUNCIL LETTER
Meeting of: September 25, 2000
AGENDA SECTION: ORIGINATING DEPT: CITY MANAGER
NO: FINANCE APPROO .
ITEM: BAD CHECK RECOVERY BY: William E1rit BY:
NO: DATE: 09/12/2000 DATE:
/73
The City is currently writing off approximately $9,000 to $10,000 in bad checks on an
annual basis. Over the years we have reviewed several alternatives and safeguards
relating to accepting checks in the liquor operation, ranging from Telecheck, CheckMate,
and other services, to various collection agencies for collecting the bad checks. On the
front end, services such as Telecheck and CheckMate are not cost- effective as their fees
are excessively high and their database of bad checks is not kept current enough to catch
the majority of the bad checks that come through the stores.
Based on our review, we recommend entering into a contract with CheckRite Recovery
Services, Inc. to attempt collecting on our worthless checks. Our current practice is to
send letters to everyone who writes a bad check, and we receive a slight response to these
letters. Under the proposed plan we would submit the check to the bank twice. After it is
returned from the bank as uncollectible, we would turn it over to CheckRite Recovery
Services, Inc. to attempt collection. Basically, this is the point where we would spend a
significant amount of time sending letters to people and have very limited results in
collections.
Attached is a proposal from CheckRite Recovery Services, Inc. They will be turning over
to the City the full amount they collect on the check and $4.00 of the service fee. It is
staff's recommendation to enter into an agreement with CheckRite Recovery Services,
Inc. for collection services on worthless liquor store checks.
RECOMMENDED MOTION: Move to authorize the Mayor and City Manager to enter
into an agreement with CheckRite Recovery Services, Inc. for check collection services.
WE:sms
0009121 COUNCIL
Attachment
COUNCIL ACTION: