Overwriting a third party check endorsement

Suppose I get a check from someone and endorse it on the back payable to someone else. Then I decide to make it payable to a different entity. Do I just cross out or white out the initial endorsement (and initial it?) Or what else?

My understanding (which could be wrong) is that banks in the US no longer accept third party checks. If the check is made out to you on the front, you are the one that has to cash it (depositing it into your account).

I think if your signature’s a scribble it’s ok. I’ve deposited checks made out to “blah blah” from “blorp blorp”'s account and endorsed them with my own name. I’ve even initialed with my own initials on a change made to a check to “blah blah” from “blorp blorp” But then I honestly believe NYC is a magical universe where normal rules do not apply in many situations.

I seriously doubt that. Checks are endorsed commonly. I’ve endorsed checks to pay for certain items in the past.

If you endorse a check to John Doe, but change your mind and want to endorse it to Chung Ho, you’d just have to get John Doe to endorse it to Chung Ho. Once John Doe is the endorsee, he is in the same position as a payee. Crossing out or whiting out an endorsee’s name is alteration of a check.

My wife has her mother sign checks over to her all the time. Never a problem and they don’t even have the same last name. So the practice is certainly still acceptable.

I think this is the technically correct answer. However, banks vary in how strictly they enforce this. I tried to cash a check made out to my band’s name, and my bank wouldn’t take deposit it to my account because it was not made out to me personally. I had to beg the bar to write me another check. However, I have seen other stuff just sort of slide through.

This is correct: “If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a “special indorsement.” When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person.” UCC sec. 3-205(a), http://www.law.cornell.edu/ucc/3/article3.htm#s3-205.

Banks are unenthusiastic about accepting third-party checks, which are seen as having greater risk, but they usually will accept them for deposit. There may be a hold placed on the account for some period of time to allow the check to clear.

Problem is that the identified person is not interested in the check.

What brought this issue up for me is that I’ve been paying my credit card bills with endorsed third party checks for years and years. (Saves me from having to make a trip to the bank.) Now, out of the blue, the CC company returned a couple of checks, claiming that they don’t accept such checks. (They say they’ve never accepted them, and that all the years that I’ve been doing it, my checks have been processed by a machine, which didn’t know the difference.) So as a practical matter, I now have two checks endorsed to my credit card company and account. The credit card people are not going to want to deal with this, and are probably not set up to do so. And the checks are from an insurance company, which is not going to reissue them without some hassle on my end.

So my question is if I can overwrite it. It sounds like you’re saying this is some legal issue. But I would have to think there must be a way around it. (The only thing I can think of, if you’re right, is to send it in again next month and hope for a machine.)

What do you mean you “endorsed [them] to [your] credit card company”? When you endorse a check, you’re just supposed to sign your own name. That allows the bearer, whoever it is, to cash it.

It means I wrote on back:

“payable to Such&Such Credit Card Company
Act. # 123456789
Cyril Fotheringay-Phipps”

In that case, the check no longer belongs to you, unless the credit card company endorses it back to you. You need a new check.

By endorsing the check to your credit card company, you’ve taken yourself out of the loop, which is unfortunate if the credit card company won’t accept it. You have four options, of which only the first three are legal:

  1. You can return the check to your insurance company and request reissuance. (Less honestly, you could tell the insurance company that the check was lost or did not arrive and ask them to stop payment and reissue.)

  2. You can send the check back to the credit card company and request them to endorse it over to you. They may not be willing to do this.

  3. You can try again to use the check for a regular payment, as you have in the past.

  4. You can forge the credit card company’s endorsement and deposit the check into your bank account, if you have one, or otherwise try to get a bank to cash it. The deposit idea is much more likely to work. This is technically forgery.

All legal issues aside. Just put under the first endorsement:

For Deposit Only
Cyril Fotheringay-Phipps

And deposit them into your account. Most likely your bank will accept them and present them to your insurance company that issued the check for payment.

If not, then go back to your insurance company and request a new check.

He really cannot do that since he already endorsed them to the cc company. Since the cc company did not accept delivery, you still own the checks, but it appears on the face of the checks that the cc company owns them. jbaker’s first three suggestions are good. I would add, however, that you write “null and void” on the checks, return them to the insurance company, and request it reissue the checks.

Yes he can. He can color them with crayon and poor orange juice on them if he wants to.

As I said in my post…All legal issues aside….

Even with the misplaced endorsement to his utility company, they are his checks. The utility company returned them. Most likely, his bank will deposit them without question. But if they don’t, then he can take it up with the check issuer.

On the one hand you say “all legal issues aside,” and then you draw the legal conclusion that “they are his checks.”

Just an economic conclusion. They aren’t the utility company’s despite the endorsement, as they utility company rendered no compensation for them and returned them to the OP. The OP still owes the utility company for the amounts on his account. The economic benefit of the check still belongs to the OP.

While the bank may have an economics department, I think you’ll find that’s not the one they ask about what to do with the check.

Related question: I have a Bank of America money order, drawn on my account, that I made out to my school. The school stamped it for deposit, but returned it to me. Can I just sign over the deposit stamp and redeposit it in my account like a check?

Interesting idea from Omar Little. I think the answer is that his approach would, as a practical matter, render the check worthless, since it would then be impossible to have a satisfactory endorsement. The only option would be to void the check and have it reissued by the insurance company.

Really Not All That Bright, the answer depends on how the school “stamped it for deposit.” If their stamp says “For deposit only” or “For deposit into account no. ____,” then only the school can deposit it. However, if the stamp is just an endorsement and is not restrictive, then the check is considered a bearer instrument and you (or any other rightful owner) can deposit it into your account.

Typically banks don’t ask anyone about the deposit of a check. Most of it’s automated now. They don’t normally get too inquisitive about endorsements and the like unless the amount of the check is significant or if there are questions after the fact. In the OP’s case the amount, I’m guess is not significant as it’s going to pay his utility bill. And secondly, no one else is going to come back and claim those funds.

On your related question, typically money orders, once they are drawn, have the money taken out of your account. Check your online balance, and see if the amount of the money has been withdrawn from your account. Normally the bank will hold those funds in their account until the money order is presented for payment. What was the reason the school returned the money order to you? If it was just electronically processed by the school and the physical MO was returned to you, then the MO has already been honored by Bank of America and would be rejected if you tried to deposit it.

It was for a seat deposit, but the school didn’t get around to depositing it before the deposit was no longer necessary (ie., my tuition was already paid). So they returned it. It hasn’t been processed.

Can’t check my balance to see if the funds were withdrawn because it’s older than I can access online, but I’m fairly certain the funds came out immediately.