Risk Management Blog

To build a proprietary online search system, a service company must first purchase UCC and lien data. Many searchers are unaware that the source of a system’s online data can have a tremendous impact on their final results report. This article discusses some key differences between state direct and third party UCC and lien data.

In many states, the state filing office makes their UCC and lien data available for purchase. In these states, a private service company can purchase the UCC and lien data in bulk, then give their customers access to that data through a privately maintained user interface.

State direct data is the most reliable and accurate source of data since it comes directly from the filing office and has not been altered intermediate party. In fact, State Direct UCC and lien data will contain the exact same information as the database the state uses to generate their certified UCC search . The index date for these searches is typically pretty current too, since the state provides updates to the service company on a regular schedule, usually either weekly or monthly.

In states where State Direct Data is not available, some service companies turn a Third Party Source. A Third Party Source is a data collection company that obtains copies of filed UCC and lien records from a state filing office, and then transcribes the pertinent lien information including: filing types, filing dates and file numbers, and debtor and secured party names and addresses in an attempt to recreate a state’s internal database. The data collection company then sells their version of the database to a private service companies to populate their UCC search systems..

The transcription process is a large-scale, ongoing data entry project, and data entry errors do occur; some of which can have a dramatic impact on a lien search report. For example, misspelled debtor names and incorrect filing dates can make it difficult for a searcher to determine the appropriate priority of claims. What’s worse; imagine if a lien is accidentally omitted from the data entirely, a lender  who is relying on a search reports drawn from that data could be missing critical information regarding existing debtor obligations and claims against the collateral being pledged.

First Corporate Solutions (FCS) purchases our data directly from the state filing office, assuring our online users will always have the highest quality, most accurate information at their fingertips. Want to learn more about the recently redesigned FCS online system? Visit us online!