Credit professionals are responsible for analyzing a wide range of data during a customer credit review. One critical, yet sometimes overlooked, detail is the customer’s legal name. Do you know your customer’s full legal name and address? This information becomes especially important when securing interest in a customer’s assets.

A common method creditors use to protect their interests is filing a Uniform Commercial Code (UCC) financing statement. This filing helps establish a creditor’s security interest in a debtor’s assets. However, the effectiveness of this protection can hinge on accuracy, particularly in how the debtor’s name is recorded.

Why Accuracy Matters: A Legal Case Study

The law firm Wolfson Bolton Kochis raises an important question: Is an abbreviation of a customer’s name fatal to perfecting a security interest? Can a trade name (i.e., “doing business as”) or a slightly altered name hold up in court?

In the case of 1944 Beach Boulevard, LLC v. Live Oak Banking Co., creditor Live Oak Banking attempted to perfect its liens against 1944 Beach Boulevard by recording a UCC statement in the Florida lien registry. However, Live Oak Banking’s UCC statement erroneously referred to its debtor as “1944 Beach Blvd., LLC” instead of its fully spelled legal name “1944 Beach Boulevard, LLC.”

1944 Beach argued that the error in the name rendered the UCCs seriously misleading and thus ineffective to perfect Live Oak Banking’s security interest. Creditor Live Oak Banking argued that using “Blvd.” instead of “Boulevard” was in accordance with the standard search query logic and search terms found on the Florida lien registry. However, the Florida Supreme Court held that the Florida lien registry does not, in fact, have any uniform search query logic or standard abbreviation terms. Consequently, the court held that even a slightly altered or abbreviated debtor name is seriously misleading under Florida law, rendering the attempt to perfect the lien insufficient and invalid.

Best Practices

To avoid costly mistakes:

✅ Always use the full legal name of the business in all invoices, contracts, and filings.

🔍 Verify the name against official Secretary of State records.

🚫 Avoid using trade names, abbreviations, or trademarks.

🔄 Update your credit files promptly when a customer’s name or address changes.

Disclaimer

WTW hopes you found the general information provided here informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including Willis Towers Watson Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).