About every other month or so, my husband and I will get a check that has both of our names on it. It hasn’t been a problem.
Until today. I put in a deposit over the weekend, and the bank called to say they wouldn’t deposit the $70 check with both of our names because we don’t have a joint account. My husband and I both endorsed the check. Both of us have accounts at the bank, but not joint accounts.
Is this a real banking rule?
Our tax rebate checks are made out to both of us, and the account is in my name only. This has worked over the years at Marine Midland–>HSBC, and Fleet–>Bank of America.
We have always both signed and deposited in the account in my name. Maybe they care who endorses first?
[QUOTE=jsgoddess]
About every other month or so, my husband and I will get a check that has both of our names on it. It hasn’t been a problem.
Until today. I put in a deposit over the weekend, and the bank called to say they wouldn’t deposit the $70 check with both of our names because we don’t have a joint account. My husband and I both endorsed the check. Both of us have accounts at the bank, but not joint accounts.
Is this a real banking rule?
[/QUOTE]
[standard disclaimer: not your financial adviser, different financial jurisdictions have different rules, etc]
The beneficiary name on a cheque should match the account name. So while a cheque payable to you solely could be paid into a joint account (as long as you were a party to the account, obviously) as well as your sole account, a cheque in joint names could not be paid into your sole account (because the other person would have no claim to the money once it goes into your account)
Personally, i think your bank are being a bit petty (especially if they have previously accepted the cheques), but I guess it’s a CYA thing.
Regards,
mtk_
I wonder if you couldn’t add “Pay to jsgoddess” on the back of the check, then have your husband sign below that, then you sign below him? That should demonstrate that he’s endorsing his interest in the check over to you.
Both of you having indorsed the check ought to be good enough. If that’s all you did then it’s a blank indorsement and I ought to be able to deposit it into my account were I to come into possession of it (a “third-party” check).
Here’s a couple pages (link and link) which has all the rules the bank has to follow for this sort of thing. See 3-110(d), perhaps the problem is that the check is made out to “jsgoddess AND mr.jsgoddess” whereas other checks you have gotten in the past didn’t have the AND explicitly. But I can’t see why having both indorsements wouldn’t fix that anyway.
Maybe you can get the bank to tell you which rule it is they’re using as an excuse to not take the check 
[QUOTE=A.R. Cane]
I wonder if you couldn’t add “Pay to jsgoddess” on the back of the check, then have your husband sign below that, then you sign below him? That should demonstrate that he’s endorsing his interest in the check over to you.
[/QUOTE]
Right, that is what I think too although I agree that the situation is stupid as is. You can sign checks over to another person even if that person isn’t the one listed on the front of the check. You could both go to the bank, cash it, and immediately deposit it into the right account.
Umm, I’m fairly sure that your bank is off their rocker.
I have deposited checks into my account that were not in any way shape or form made out to me on the front. All that is required is an indorsement on the back from the payee on the front, making me the indorsee. The payee on the front can be A, A or B, A and B, as far as I understand. A or B indicates that either can indorse, and A and B indicates both have to indorse.
Simply putting the payee’s signature on the back makes it a bearer check and as such are payable to whoever is in possession regardless of names. Indorsing it to a specific person requires writing “Pay to the order of B - Signed A” on the indorsement line. B can then theoretically write “Pay to the order of C - Signed B” below that.
So the check that you and your husband both indorsed by simply putting signatures on the back became a bearer check, and as such even I should’ve been able to deposit it into MY account.
P.S. Anybody know why I keep writing indorse? I picked it up somewhere and it seems to be a valid spelling, at least according to my dictionary, but others always give me funny looks.
[QUOTE=groman]
P.S. Anybody know why I keep writing indorse? I picked it up somewhere and it seems to be a valid spelling, at least according to my dictionary, but others always give me funny looks.
[/QUOTE]
“Indorse” is the spelling used in the Uniform Commercial Code, which most states have adopted (with alterations in many cases) as that state’s Commercial Code. I suppose that makes it the “official” spelling, sorta.
Had a bank do this to me for an ATM deposit. I sent the check back asking if they had returned it because of insufficent funds. Check deposited.
I know my parents had this problem with a mortage check they get. At first it was writen out to “Mr. and Mrs. Lastname”. The bank would not accept it unless they both were there. So my mom wrote to the mortage holders, and asked them to write it out to “Mr. or Mrs. Lastname”. No more problem.
-Otanx
There is no general law that I’m aware of that would prevent a bank from cashing (or accepting the deposit of) a check made jointly payable to two people, as long as both have indorsed the check, even if the account at the bank is only in the name of one of the two payees. To the contrary, the check becomes bearer paper, negotiable by anyone, once all payees have indorsed it.
There’s only one exception that I can think of that may possibly apply here. You didn’t put any kind of restrictive endorsement (yes, either spelling is acceptable) or the back, did you? (For example, “for deposit only”?) If you did, I salute your teller. She made the right call.
If not, the bank is applying its own policy, not any law or other externally-mandated rule. That’s not to say the bank is necessarily being unreasonable – such a rule does reduce its fraud/forgery risk.
Usual disclaimer. Although IAAL, and do practice in this area of the law, laws vary from state to state (although not usually in this area). I’m not your lawyer and you’re not my client. This is general information and not reliable legal advice. See a lawyer licensed in your state for that.
I used to work as a teller, and I thought I had it figured out, but now I’m confused by this “bearer check” business.
So suppose Joe writes a check to “Mr. and Mrs. Fitzenbladenstostigenhausen”, and on the back are two scribbles which look vaguely like they begin with the letter F. I can just take this to my bank and deposit it into my account titled “KidScruffy”? And tell the teller “sure, sure, it was signed by the F’s, just trust me”.
Doesn’t my bank, or perhaps Joe’s bank, want to make sure that the F’s actually signed it? Who’s lookin’ out for the Fitzenbladenstostigenhausens?
I’ll just add that this is my first exposure to this spelling - “indorsed”. Learn a little every day…
[QUOTE=KidScruffy]
So suppose Joe writes a check to “Mr. and Mrs. Fitzenbladenstostigenhausen”, and on the back are two scribbles which look vaguely like they begin with the letter F. I can just take this to my bank and deposit it into my account titled “KidScruffy”? And tell the teller “sure, sure, it was signed by the F’s, just trust me”.
Doesn’t my bank, or perhaps Joe’s bank, want to make sure that the F’s actually signed it? Who’s lookin’ out for the Fitzenbladenstostigenhausens?
[/QUOTE]
Banks are very very particular about signatures on third-party checks or bearer checks being cashed/deposited by somebody other than the intended payee. The indorsement signature better be letter-for-letter what it is supposed to be. If the check is made out to Jill M. Stone, and the back is “Pay to order of Billy Bob. Signed Jill Stone” the bank might very well refuse because of the missing middle initial. Scribbled signatures won’t do for third party deposit.
[QUOTE=groman]
… the intended payee…
[/QUOTE]
and of course I meant the originally intended payee, on the front of the check.
The signatures may be actually legal and valid, but the bank doesn’t know it unless your husband signs in front of the teller and presents valid identification. If the bank decides to process it without all that rigamoroll, then the bank is just doing you a favor based upon your good banking history with that bank.
The bank just wants to be sure that they are both valid signatures before processing the check. Since your husband isn’t on the account, the bank wants to know that he actually is the one who signed it. Otherwise, you could just sign (forge) his name and stick it in your account without him knowing. Then, if you secretly did that, and your husband found out about it later, he would demand his money from the bank saying the signature was a forgery and the bank should have checked the signature before paying the money out to you.
In sum, the bank is protecting itself against forgery claims by third parties.
[QUOTE=groman]
Banks are very very particular about signatures on third-party checks or bearer checks being cashed/deposited by somebody other than the intended payee. The indorsement signature better be letter-for-letter what it is supposed to be. If the check is made out to Jill M. Stone, and the back is “Pay to order of Billy Bob. Signed Jill Stone” the bank might very well refuse because of the missing middle initial. Scribbled signatures won’t do for third party deposit.
[/QUOTE]
So the advice to a criminal would be instead of writing something that looks like a signature, make sure you just print clearly every letter on the payee line…
[rant] The bank I worked at had a stricter policy than what you mention. In a similar situation, we would first hope that the actual payee had an account with us, in which case we’d compare the signature on the back to their signature card. Or alternatively, we’d ask the bearer to bring us a copy of the payee’s driver’s license (etc) so that we could verify the signature on the back was the payee. A less strict policy seems to invite fraud, but it was always a pain to explain to someone that we value the payee’s rights to their money over the bearer’s convenience. The bearer would insist that it was endorsed and therefore they should be able to cash/deposit it, and my response was always “how do I know it was endorsed by the payee??”. [/rant]
For the record, I was polite and never argued with our customers. If we could verify a signature, we wouldn’t ask that someone come in personally. And of course the rules would bend for low-dollar amount checks.
–KidScruffy
[QUOTE=KidScruffy]
I used to work as a teller, and I thought I had it figured out, but now I’m confused by this “bearer check” business.
So suppose Joe writes a check to “Mr. and Mrs. Fitzenbladenstostigenhausen”, and on the back are two scribbles which look vaguely like they begin with the letter F. I can just take this to my bank and deposit it into my account titled “KidScruffy”?
[/quote]
Legally? The check is fully negotiable, assuming of course that scrawls are actually the signatures of the Fitzwhatevers. As I said, though, the bank might have a policy against allowing a customer to deposit it, because there is a fraud risk. (My point was that there’s no law that prevents a bank from accepting this deposit.)
Note that there’s the same fraud risk if the check is endorsed over (made payable) to you by the Fitzwhateverscrawls, though. For that matter, there’s always some fraud risk, even if it’s a one party check payable to the depositor. After all, how does the bank know that the maker’s signature isn’t forged?
[QUOTE=KidScruffy]
Doesn’t my bank, or perhaps Joe’s bank, want to make sure that the F’s actually signed it?
[/quote]
Of course your bank might be concerned about this. But if the check turns out to be bad, it can look to you and your account for reimbursement. That’s why some banks have policies against accepting such checks, and also why some banks accept them, at least for established accounts/longstanding customers.
Joe’s bank is pretty safe. It gets reimbursed by your bank (in most circumstances) if the check turns out to be missing a valid endorsement. The more interesting question is what happens if you go directly to Joe’s bank (where you don’t have an account) with this check and ask them to cash it.
Well, no one, and everyone. No one here has a direct contractual duty to them, except maybe Joe. In most circumstances though, unless the Fitzwhatevers were careless or otherwise facilitated the forgery, they have a claim for conversion. Also, if the check was stolen from Joe, before he gave it to them, Joe still owes them the debt that the check was supposed to satisfy.
Same disclaimer.
[QUOTE=KidScruffy]
[rant] The bank I worked at had a stricter policy than what you mention. In a similar situation, we would first hope that the actual payee had an account with us, in which case we’d compare the signature on the back to their signature card. Or alternatively, we’d ask the bearer to bring us a copy of the payee’s driver’s license (etc) so that we could verify the signature on the back was the payee. A less strict policy seems to invite fraud, but it was always a pain to explain to someone that we value the payee’s rights to their money over the bearer’s convenience. The bearer would insist that it was endorsed and therefore they should be able to cash/deposit it, and my response was always “how do I know it was endorsed by the payee??”. [/rant]
[/QUOTE]
I bank with Wells Fargo and I’ve always dropped third party checks into the ATM depository and never had any problems. Of course “always” is like four times in my entire life, but still.
The teller at my local bank actually told me some guidelines that don’t line up with her own bank’s policy, and repeated them 4 times to me while I was standing at the counter.
I was a half-inch from cancelling my account, then I just felt sorry for her for being so bad at her job that she would have offended me; no real banker ever says anything undiplomatically. My wife double-checked the policy in question at another branch, and the teller let my wife know the real score, and suggested that if it happen again we should escalate to the head teller.