Which is NOT a method of perfecting a security interest?

The correct response indicates that making an oral agreement is not a method of perfecting a security interest. In secured transactions, perfection of a security interest is crucial because it establishes the secured party's rights in the collateral against third parties, including other creditors.

Perfection can occur through various established methods that provide notice to the public about the security interest. Filing a financing statement is one method where a debtor and creditor file the necessary documentation with the appropriate public office, which serves as public notice. Taking possession of the collateral is another method, where the secured party physically holds the collateral, eliminating disputes about who has a claim to the asset. Additionally, certain types of collateral—like deposit accounts or electronic chattel paper—can be perfected by establishing control over the collateral.

In contrast, an oral agreement lacks the necessary formalities and public notice required to perfect a security interest effectively. There is no documentation filed that third parties can access to be aware of the secured party's claim, making it a less reliable means of ensuring the priority and enforceability of the security interest. Hence, an oral agreement does not satisfy the requirements for perfection and is not regarded as a valid method within secured transactions.