System and method for recording negotiable instruments

A method of placing holders of negotiable instruments on notice of a possible defect or defense against the payment of said negotiable instrument, comprising:

• creating a negotiable instrument, placing a written notice in a prominent and noticeable location on the face of said negotiable instrument to indicate that the within instrument may be subject to a defect or defense against payment thereof, placing address information comprising a telephone number and a website address in a prominent and noticeable location on the face of the said negotiable instrument indicating where to verify whether such defect or defense exists, delivering said negotiable instrument to a first holder thereof so that said holder and all subsequent holders thereof are on notice as to said possible defect or defense, negotiating the transfer of said negotiable instrument by said first holder to a subsequent holder, contacting an information storage facility, conveying descriptive information about said negotiable instrument to a receiver of said descriptive information, said descriptive information including identifying information and details about said defect or defense, transmitting by said receiver said descriptive information for recording in a retrievable electronic database, and contacting said storage facility for retrieving said details regarding said defect or defense.

A system for putting a holder of a negotiable instrument on notice of a possible defect or defense against the payment thereof and for recording descriptive information about said negotiable instrument in an accessible location, said descriptive information including details about said possible defect or defense, comprising:

• said instrument bearing on the face thereof a notation that said instrument may be defective or subject to a defense against its payment and contact information for verifying if said instrument is defective or has a defense, a storage facility for retrievably storing said descriptive information, means for contacting said storage facility for recording said descriptive information, and means for contacting said storage facility for retrieving said descriptive information.

A system for processing a negotiable instrument bearing a notice that said negotiable instrument may be defective or subject to a defense against payment comprising:

• a database for electronically retrievably storing descriptive information about said negotiable instrument, said descriptive information including details about said possible defect or defense and identifying information sufficient for identifying said instrument and locating said details when stored in said database, a server connected to said database for controlling the flow of information to and from said database, electronic means connected to said server for inputting said descriptive information for recording in said database, and electronic means connected to said server for retrieving said descriptive information by inputting said identifying information.