Who Should You Pay After Receiving a UCC 9-406 Notice?

You’re a customer with an ongoing business relationship. You’ve been paying your vendor as agreed—on time, without issue. Then, unexpectedly, you receive a UCC 9-406 notice from a third party instructing you to send payment somewhere else.

A UCC 9-406 notice is a request from a third party claiming the right to receive payment instead of your vendor.

Why Payment Confusion Happens After a UCC 9-406 Notice

The notice is formal. It references legal language. It may suggest urgency or obligation. And at the same time, the business you’ve been working with is still expecting payment—and may be telling you to continue paying them.

Now you’re caught in the middle.

You’re not trying to take sides. You’re trying to avoid making a mistake.

In many cases, the party issuing the UCC 9-406 notice is a Merchant Cash Advance (MCA) provider that does not hold a senior secured claim to your payments. But the notice still creates confusion—and that confusion drives behavior.

Customers hesitate. They pause payment. And that pause disrupts the business.

As Aaron Todrin explains:

“Most account debtors don’t redirect payment, they pause… what feels like a prudent response interrupts receivable flow and places immediate pressure on the business.”

Who Actually Has the Right to Payment

That’s why it’s critical to understand how to respond when you receive a UCC 9-406 notice.

So the question becomes:

Who should you pay after receiving a UCC 9-406 notice?

In most cases, you should continue paying the business you’ve been working with—unless and until a third party can clearly prove that it has a superior legal right to your payments.

A UCC 9-406 notice introduces a claim. It does not establish one.

What You Should Do Before Changing Payment Behavior

You are entitled to require proof.

As restructuring attorney Annette Jarvis explains:

“UCC 9-406(c) gives account debtors the right to request reasonable proof of assignment.”

And as Shane Heskin adds:

“…set clear expectations for response, typically within two to three business days… If adequate proof is not provided… continue paying the vendor in the ordinary course.”

The correct response to a UCC 9-406 notice is to request proof of assignment and priority within two to three business days and continue paying your vendor unless that proof is provided.

See the full ABF Journal article.

If you’re unsure whether you must comply at all, see: Do You Have to Comply with a UCC 9-406 Notice?
If you’re concerned about risk, see: What Happens If You Pay the Wrong Party After a UCC 9-406 Notice?

Until priority is clearly established, your existing payment relationship remains the most reliable guide.