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You’re a customer who has received a UCC 9-406 notice telling you to stop paying a business and to send payment elsewhere.
You weren’t expecting it. You don’t know the sender. And the notice uses legal language that suggests you may be required to act.
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So what is a UCC 9-406 notice?
It is a directive from a third party claiming the right to receive the payment instead of your vendor.
How UCC 9-406 Notices Are Supposed to Work
In many cases, this type of notice comes from a Merchant Cash Advance (MCA) provider—an entity that typically does not hold a senior secured claim to your payments. Yet the notice is still issued in a way that appears authoritative.
That creates confusion. And that confusion often leads to hesitation—delayed payment—which puts pressure on the business. Before deciding what to do, it’s important to understand what this notice actually means.
When used properly, a UCC 9-406 notice reflects an existing legal right—typically held by a senior secured lender with a valid assignment of receivables, a perfected security interest and priority over other creditors.
Why Many UCC 9-406 Notices Create Confusion
Critically:
“A 9-406 notice does not create a right to payment. It only reflects one, if it exists.”
In MCA-driven situations, that underlying right is typically absent. Yet the UCC 9-406 notice still works—because it creates uncertainty.
As Aaron Todrin, President of Second Wind Consultants, explains:
“What feels like a prudent response interrupts receivable flow and places immediate pressure on the business.”
What You Should Do After Receiving One
The correct response to a UCC 9-406 notice is to verify the claim by requesting proof within two to three business days before changing payment behavior.
Read the full ABF Journal article.
See also: Do You Have to Comply with a UCC 9-406 Notice?
Related: Can You Ignore a UCC 9-406 Notice?
The correct response is not automatic compliance—it’s verification. If you don’t receive that verification, continue paying the business as you would have.
