I must acknowledge that I did not investigate this option as thoroughly as I might have. Come Monday, I will contact branches of various banks in my area to ask their policies on accepting third-party checks.
I doubt I will find any takers. Granted, the check originates with the Federal Treasury, banks would have no reliable way of authenticating the original payee’s ID, signature or endorsement, whether the latter was willful or made under duress, or whether the whole effort was part of ID theft scam. It might be different if both parties were in front of a teller, could provide proof of their identities and did the endorsement right then and there, but in this case, that is not a possibility.
Rent is collected by a local property management company and deposited in the U.S bank account of the property’s co-owner. Presumably, he has it wired to an account in Finland. Unfortunately, my friend did not set up a U.S. bank account when she had the chance.
I am very skeptical any reputable bank would have such lax policies regarding third-party checks. As such, I would ask you for the name of this bank. If you prefer, please feel free to send me a PM. Thanks.
Have you used mobile or online deposits? The system doesn’t know the difference between an actual check and a very good picture of a check. As long as it can read the routing numbers on the bottom, that’s about all that matters. So it’s not that this is the bank’s policy, it’s just that this is what technology allows us to do today.
The rest is mostly honor system. If you deposit something fraudulently, the idea is that someone will complain and/or file a report and it will catch up to you. My bank pretty much never questions anything I deposit, due to my financial history with them, credit, and the fact that any deposit–while available immediately for cash withdraw–will be charged to my bank’s credit card as a cash advance if the check isn’t honored (that’s never had to happen, though). If a check bounced or something, they would cover the amount as a cash advance, and I’m sure I would lose privileges if that happened too much.
The bank is USAA.
That’s how checks work, though. An endorsed check is like cash–it can be used by anyone. That’s why you don’t sign the back until you are about to deposit it. If you endorse it, and lose it, it can be deposited by whomever picks it up.
If you deposited cash, the bank has no idea if you received the cash from a willing participant or one under duress. No different than a check.
This all reminds me of the scene in Ghost where Rita Miller signs the back of her cashiers check and hands it to the nuns.
Plenty of banks (including Citibank within the past couple of years ) still take third party checks without the original payee being present or having any proof of the payee’s signature. Because they will treat it just as they will a check made to the account holder - if I cash a third party check for $1000, my bank will hold $1000 of my funds until the check clears , and if the check bounces later on, the bank will recoup the funds from me.
All of that is also true if you were to simply present a personal check made out directly to you. In both cases, your bank will put the check through, and wait a reasonable amount of time before making the funds available for withdrawal. If the check turns out to be fake or otherwise nonnegotiable it will be returned to your bank, the bank will claw back the funds, and you will be charged a fat bounce fee. The bank is not really taking much of a risk. The worst-case scenario for the bank is that you withdrawal the funds as soon as available, then close your account, and then the check bounces. In that case you have probably committed a federal crime.
Maybe I missed it, but couldn’t your friend just sign over his IRS income refund check to you, you deposit it in your own U.S. bank account, and then you arrange for your bank to transfer the same amount to his bank account in Finland?
My branch said no. I have not yet called other branches or branches of other banks.
I have not heard from my friend in a couple weeks; she was experiencing computer problems. Also, the IRS remains virtually unreachable by phone. Assuming a solution – any solution – to this issue is found, at some point my friend will need to contact the IRS by phone to arrange things. The check she received in 2019 expired last June. Fortuitously, the passage of time would seem to work out favorably as I expect the IRS will become easier to reach in the coming months.
I received word last week that my query to the IRS concerning the feasibility of using an online currency exchange company has been forwarded to the proper person…who is of course on vacation. Last time, it took the IRS 3-4 weeks to reply; I am anticipating a 4-5 week wait this time.
I’m not sure why they’d even need to know it was a currency exchange company. They just deposit the funds to a local bank account, it’s no different to any other bank account.
Edit: My TransferWise US bank account is with the Community Federal Savings Bank with headquarters in New York.
I agree it should be no problem, but I do not trust the IRS - they are not like a conventional vendor - to let things go smoothly. Call me paranoid, but given that the passage of time is working in my friend’s favor, I would prefer to make absolutely sure of things beforehand to eliminate any possibility of going through the process only to get somehow screwed at the end.
That surprises me, in this day and age. I would keep asking to be referred to a supervisor, and then yet another higher-up, until you reach someone who can get it done for you.
There may be some confusion between a “US bank account” and an account denominated in USD.
Example: it is perfectly possible to have an USD savings account in Hong Kong. To wire money there, you would normally use SWIFT MT103. Note there is a field (59) to put the beneficiary’s name and account number, and also a field (54) for a correspondent bank, which in our example will be located in the US (like HSBC USA, New York) and whose settlement account will be a US bank account with its own account number and Fedwire and ABA numbers.
Your Transferwise example seems analogous: funds are wired to an account at the Community Federal Savings Bank in (big surprise) New York, again along with instructions to credit the final receiving account. (Unless they can tell who it is just from the account number? I assume the person’s name is included in the payment request in any case.)
In either case, the minimum the IRS, or whoever is sending money, needs to be able to do is arrange an electronic transfer of USD to a US bank account, along with enough accompanying information to enable the intermediate bank to complete the transfer (i.e., to credit the correct transferwise user / account at the Hong Kong branch of HSBC)
TransferWise use ACH payments and are able to do so because they have a US bank account. You don’t get a personal US account though, you are just able to use details provided by TransferWise which presumably has enough information to let them allocate the appropriate funds to you.