Who must acknowledge possession for possession to be used as a perfection method?

For possession to be used as a method of perfection in secured transactions, it is essential that a third-party agent acknowledges possession of the collateral. This is because the purpose of perfection through possession is to establish priority over other creditors and to provide public notice of the security interest held. A third-party agent is someone who is not the debtor (the person who owes money) or the secured party (the creditor), but who is entrusted with holding the collateral. By having a neutral party take possession of the collateral, it reduces the risk of the debtor transferring it or claiming ownership over the collateral without the secured party's consent.

When the third-party agent acknowledges possession, it effectively showcases that the collateral is no longer in the debtor's control, reinforcing the secured party's interest. This acknowledgment serves as a vital part of establishing the validity of the security interest and ensuring that it is perfected according to the Uniform Commercial Code (UCC), which dictates the rules surrounding secured transactions.

In contrast, if the debtor were to acknowledge possession themselves, it may not provide the same level of notice or priority since the debtor could potentially still act in ways that undermine the secured party's interest if they retain control over the collateral. Similarly, the involvement of bystanders or the original