How to Dispute a UCC Filing in South Carolina: The UCC-5 Information Statement and Secretary of State Cancellation

A UCC filing you never authorized does not fix itself. It sits in the Secretary of State's index. Lenders see it. Buyers see it. Factors and processors see it. It stays there until someone with the right paper forces a change.

South Carolina gives you a dispute track most owners never use. It starts with the UCC-5 information statement under S.C. Code § 36-9-518. That form puts your position on the public record. Used correctly, it can also trigger something stronger: review by the Secretary of State, a demand that the filer produce the security agreement it claims you signed, and cancellation if the filer cannot support it.

Read the limit first. Under § 36-9-518(c), a UCC-5 by itself does not change the effectiveness of the filing you dispute. It is a flag, not a deletion. Its value is what it starts — in South Carolina, a UCC-5 alleging a wrongful filing can move the dispute into the Secretary of State's office.

This post walks through that track: certified search, build the record, file the UCC-5 with a clear basis statement, invoke the cancellation power, and plan for what happens after — including the filer's right to appeal.

How to Dispute a UCC Filing

Start with the record, not with an argument. The first step in every dispute is a certified UCC search — the UCC-11 search report — from the South Carolina Secretary of State, run under the exact legal name indexed for your business. You need the filing number, the filer of record, the filing date, and the collateral description exactly as they appear. A dispute that guesses at the filing fails for a simple reason: the forms require you to identify the specific record you are challenging.

Once you have the certified search, sort the problem into one of three buckets. First, the filing is inaccurate — wrong debtor name, wrong collateral, wrong amount, or a filing that was amended or terminated in part but still reads wrong. Second, the obligation is over — you paid, settled, or finished the deal, and the filing should have been terminated. Third, the filing was never authorized at all. You never signed a security agreement covering that collateral. The filer filed on an application, a quote, or nothing.

The bucket decides the tool. A terminated obligation usually runs on the termination track: a demand under § 36-9-513(c), then, if the filer does not act in 20 days, a debtor-filed termination under § 36-9-509(d)(2). An inaccurate or wrongfully filed record is UCC-5 territory. A never-authorized filing is both — run the tracks in parallel. Our guide to how to remove an unauthorized UCC lien in South Carolina covers the termination track in full. This post covers the dispute track. Calls do not change the index. Paper does.

UCC-5 Information Statement to Dispute a Filing — What It Does

The UCC-5 is the Article 9 information statement. People also call it a correction statement. The name matters less than the statute.

Under § 36-9-518(a) and (b), any person may file an information statement about a record indexed under that person's name if the person believes the record is inaccurate or was wrongfully filed. The statement must identify the record by its file number and state the basis for the filer's belief that the record is inaccurate or wrongfully filed.

You do not need the filer's permission to file a UCC-5. You do not need a court order. You need a record indexed under your name, a belief grounded in facts that it is inaccurate or wrongful, and a clear statement of why.

The UCC-5 puts that dispute where searchers will find it: in the same index as the filing itself. A lender, buyer, or lawyer who pulls the record sees both the original filing and your statement contesting it. That alone can change a conversation. What it does not do is just as important, and the next sections return to it.

How to File a UCC Correction Statement in South Carolina

The mechanics are simple. The drafting is where disputes are won or lost.

First, pull the certified UCC-11 search and copy the initial filing number exactly. The UCC-5 must identify the record by file number. A wrong digit points your dispute at the wrong record, or at no record at all.

Second, complete the UCC-5 form, identifying yourself and the filing you dispute. Keep the debtor and secured party names exactly as they appear on the certified search, even if one is wrong. Do not create a second confusion by restyling the names.

Third, write the basis statement — the core of the filing, covered next. State facts, not conclusions alone: when the filing appeared, what you did and did not sign, what obligation, if any, ever existed, and what has happened since.

Fourth, file it with the Secretary of State and pay the fee. Currently, the UCC-5 filing fee is $8.00 for pages 1-2, plus an $8.00 SC.gov service fee. Confirm the current amount at filing.

Fifth, after it posts, pull a fresh certified search and verify your statement appears against the correct filing number. Keep the receipt and the follow-up search together. That packet is what you hand to a lender or to the Secretary of State if the dispute escalates.

South Carolina UCC-5 Correction Statement — The Form and the Basis Statement

The form asks for identification. The basis statement does the work.

A weak basis statement says only that the filing is "wrongful" or "unauthorized." That checks a box. It persuades no one, and it gives the Secretary of State little to act on if you later invoke the cancellation power. A strong basis statement reads like a short, dated record.

Include, where they fit: the filing number and date; whether you ever signed a security agreement with the filer, and if so, what collateral it actually described; whether any obligation ever existed, and if it ended, when and how; any termination demand you made and the filer's response or silence; and the specific reason the record is inaccurate or wrongful — for example, that no authenticated security agreement authorized it, or that it should have been rejected for a reason covered below.

Be precise and be able to prove every line. Do not exaggerate a good claim into a shaky one. If you signed something, say what it was. If you never had a relationship with the filer, say that plainly. The basis statement is a public record. Write it for three readers: the filer, the next lender who searches your name, and the Secretary of State reviewer who may decide whether the filing survives. Keep everything the statement refers to — payoff letter, settlement, demand letter, certified search. You will need them in the next stage.

A UCC-5 By Itself Does Not Remove the Filing — Read This Before You Stop There

This point is in the statute, and it is the most skipped paragraph in this area of law.

Section 36-9-518(c) provides that an information statement does not change the effectiveness of the contested filing. Filing a UCC-5 does not terminate the UCC-1. It does not amend it. It does not make it ineffective. Standing alone, it flags the record as disputed.

That limit has real consequences. If a closing or loan is riding on a clean search, a UCC-5 alone will not give the searcher a clean record. The original filing still reads as effective, now with your objection beside it. Many searchers want the filing terminated or cancelled, not annotated.

Treat the UCC-5 as step one, not the finish. In South Carolina, a UCC-5 alleging a wrongful filing that should have been rejected is the trigger for the Secretary of State's review and cancellation power under § 36-9-518(e). With it on file, you move from asking the filer for a favor to asking the State to test the filer's right to be on your record. If your facts also support a termination demand, run it at the same time.

Wrongfully Filed: The Secretary of State's Cancellation Power

South Carolina law draws a line between a filing that is merely disputed and a filing that should never have been accepted. That line is in § 36-9-516(b).

Under § 36-9-516(b)(8), a record is rejectable if the Secretary of State determines it was not created under Chapter 9 of Title 36, or was intended for an improper purpose. The statute gives examples of improper purpose: fraud, hindrance, harassment, and wrongful interference.

Under § 36-9-516(b)(9), rejection also covers records where the debtor and the secured party are the same person or entity, where the collateral is outside the scope of Chapter 9, or where the record was filed for a purpose other than a Chapter 9 transaction.

Those are screening rules at the filing office door. Section 36-9-518(e) gives them a second life after a filing has been accepted. If your information statement alleges a record was wrongfully filed and should have been rejected under § 36-9-516(b)(8) or (b)(9), the Secretary of State must decide without undue delay.

That duty matters. The statute requires a decision, and it arms the Secretary of State to get the facts from both sides. If your UCC-5 is a (b)(8) or (b)(9) claim, say so in the basis statement, in those terms. A reviewer should not have to guess which standard you invoke.

Not every bad filing fits. A filing authorized when made that should have been terminated after payoff belongs on the termination track. Reserve the cancellation claim for filings wrongful at the start: no Chapter 9 transaction behind them, an improper purpose, collateral outside the chapter, or the same person on both sides.

Making the Filer Produce the Security Agreement It Claims Exists

Here is the distinctive part of the South Carolina procedure, and the part phantom filers least expect.

Under § 36-9-518(e), in deciding a wrongful-filing allegation, the Secretary of State can require the filer and the person who filed the information statement to produce more information. The statute expressly includes, among what can be required, an original or a copy of the claimed security agreement.

That reverses the burden that makes bogus filings so durable. In private correspondence, an unauthorized filer can stall with vague claims that you "agreed to terms" somewhere. Before the Secretary of State, the question becomes a document: produce the security agreement. If a signed agreement covering the collateral exists, the filer can produce it and the filing will likely stand, subject to any termination or accuracy dispute. If it does not exist, there is nothing to produce — and that absence is the case.

Be ready to produce your side promptly: the certified search, any agreement you actually did sign, payoff or settlement proof if an obligation ended, and your termination demand with proof of delivery. Prompt, organized production makes the filer's silence stand out.

If the Secretary of State finds the filing wrongful, the result is not a note in the margin. The record is cancelled, and a cancelled record is void and has no effect. The pattern of filings that collapse at this stage is part of why we track companies accused of bogus UCC filings — the complaints repeat because the model depends on debtors never forcing the filer to produce its paper.

Can a Lender File a UCC Without My Permission? The Authorization Fight

No filing is valid just because a form was accepted. Authorization is the threshold question, and Article 9 answers it in § 36-9-509 and § 36-9-510.

Under § 36-9-509(a) and (b), a financing statement may be filed only if the debtor authorized the filing in an authenticated record. Signing a security agreement counts as authorization — but only for the collateral that agreement describes. Under § 36-9-510(a), a filed record is effective only to the extent it was filed by a person entitled to file it.

Apply that to the facts owners actually face. A request for a quote is not a security agreement. A credit application is not a security agreement. A phone call, a broker submission you never signed, or an unsolicited product or service is not a security agreement. None of those, standing alone, authorizes a blanket filing against all your assets. If the filer cannot point to an authenticated record in which you authorized the filing — most directly, a security agreement you signed describing the collateral — its filing was made without entitlement.

Two limits keep this argument honest. First, if you did sign a security agreement, the filer was authorized as to the collateral it describes, even if you dispute the balance. That fight is about payoff and termination, not authorization. Second, the actual paper, read closely, decides these cases. Do not assume what you signed. Read it before you say you signed nothing.

Where authorization fails, the remedies stack: the UCC-5 and cancellation track in this post, the termination demand and debtor-filed termination, and damages under § 36-9-625 — including, under § 36-9-625(b), loss caused by an Article 9 violation, and the $500 penalties provided in § 36-9-625(e) for specified failures, including an unauthorized filing and a refused termination. Whether you can recover, and from whom, is covered in our post on whether you can sue over an unauthorized UCC filing.

UCC Filing I Never Authorized — Building the Record Before You File

The strongest UCC-5 is filed second. The record is built first. That order takes days, not weeks, and it pays for itself at every later stage.

Build these pieces before you file. One, the certified UCC-11 search — a filer with one unauthorized filing sometimes has two. Two, everything you ever signed with or received from the filer: agreements, applications, emails, portal terms, invoices. You are proving a negative, and you prove it by producing the full, thin file of what the relationship actually was. Three, surrounding proof: if there was never a loan or advance, records showing no funding from the filer are powerful. Four, a written termination demand under § 36-9-513(c), sent so delivery can be proved, demanding termination within 20 days. The filer's refusal or silence becomes part of the basis statement. Five, a one-page timeline: first contact, anything signed, any funding or none, when you discovered the filing, when you demanded termination.

Then file the UCC-5, with a basis statement drawn from that timeline. If the facts fit § 36-9-516(b)(8) or (b)(9), allege wrongful filing in those terms and ask for the § 36-9-518(e) determination. Send the filer a copy by a method you can prove. Building the record first does not delay relief. A thin UCC-5 invites a slow review. A documented one forces the only question that matters: where is the security agreement?

What Happens After the Secretary of State Cancels a Filing

If the Secretary of State finds under § 36-9-518(e) that the filing was wrongful, the record is cancelled. A cancelled record is void and has no effect. That is stronger than a termination in one respect: termination ends a filing that was effective; cancellation declares that this wrongful record has no effect as a filing.

Do the verification work anyway. Pull a fresh certified search after cancellation and confirm how the record now appears. Keep the cancellation determination with the search, the UCC-5, and your support as one packet. That packet answers the next lender or processor who asks why the filing appeared on an earlier search — old searches keep circulating after the State record is fixed.

Then plan for the appeal. Under § 36-9-520(e), the secured party may appeal a refusal or cancellation to the South Carolina Administrative Law Court within 30 days. A cancellation is strong, but not beyond challenge for those 30 days. Calendar the window, keep your record intact until it closes, and do not tell a lender the matter is permanently closed until the period has run or any appeal is resolved. Most filers who could not produce a security agreement to the Secretary of State do not improve their position by asking a court to look.

If no appeal comes, the dispute track has done what a UCC-5 alone could not: the filing is gone with no effect, on a State determination, after the filer had its chance to produce its claimed agreement and failed. Notify any lender or processor that flagged the filing, provide the packet, and keep the file.

Dispute It on Paper, With a Lawyer Who Will Force the Filer to Produce Its Agreement

A wrongful UCC filing survives on inertia. The filer counts on the cost and confusion of fighting it exceeding the cost of living with it — until a loan, a sale, or a processor hold makes living with it impossible. The dispute track exists to break that math: a certified search, a documented record, a UCC-5 with a basis statement that invokes § 36-9-516(b)(8) or (b)(9) where the facts fit, and a Secretary of State review that can require the filer to produce the security agreement or lose the filing.

Traywick Law Offices handles unauthorized and wrongful UCC filings for South Carolina businesses: certified-search audits, UCC-5 information statements, Secretary of State cancellation proceedings, termination demands and debtor-filed terminations, and § 36-9-625 damages claims where a wrongful filing cost you financing or a deal. Whether the filing blocking you is inaccurate, finished, or was never authorized at all, there is a track for clearing it — and the first step is looking at the actual record. Contact Traywick Law Offices or start through our legal opinion intake and bring the certified search if you have it. We will tell you which track your filing belongs on, and what it will take to clear it.