Welcome back for this, the final post of our Evaluating State UCC Search Options blog series! In our previous post on the benefits of a proprietary database, we noted that private search systems offer several key benefits including broad-based name searching capabilities, expansive online image libraries and consistency in search logic and searching practices. This week we will examine some things to watch out for when using a proprietary search system to satisfy UCC search requirements.
Source of the Data
Remember, a proprietary search system is one that is built and maintained by a private service company. To build their system, a service company must first purchase UCC and lien data. The source of that data is the first thing to consider when evaluating a proprietary search system. There are two primary sources of UCC and lien data:
1. State Direct Data is UCC and lien information that a state filing office makes available for purchase in bulk. With state direct data, a private service company purchases the UCC and lien data in bulk, builds a user interface and makes the data searchable via their online system. State direct data is the most reliable and accurate source of data since it comes directly from the filing office and will closely match the database the state uses to generate their certified searches.
2. Service companies can also purchase UCC and lien data from a Third Party Source. In these cases, a data collection company will obtain copies of UCC and lien records then transcribe and catalog the data in order to recreate a state’s internal database. This process opens the door for errors to be introduced into the data including misspelled names, incorrect filing dates and even missing liens.
When considering using a proprietary search system, be sure to know the sources of the data. Third party data entry errors compromise the integrity of the data and can lead to an unreliable search result.
Another potential drawback of a proprietary search system is the index date. Because the private service company that maintains the search system must wait for updated information from their data source, there can be some lag time before UCC and lien records are available to search online. An online index date is typically only a week or two behind the date a user performs the search, but can be longer if the data source is behind in aggregating data and supplying updates.
In closing, keep in mind that no state UCC search option is perfect. Through this blog series, we hope to have armed you with the information you need to confidently evaluate potential solutions based on their merits and potential drawbacks.