Before I call up someone and make a fool of myself…yesterday we got a check from a dentist made out to my husband. He signed the back, and I signed the back. I took it to a bank that I really don’t use much (we both belong to a credit union, but this bank account is in my name only) and tried to put it into my checking account. They sent it back out saying as my husband didn’t have a joint account with me, they would have to ‘verify’ he signed the back of the check before they would deposit it.
???
As there was a long line of cars behind me, I didn’t question this and took the check to the credit union and put it in our account there… But is this something banks are doing now? How would they verify it - call my husband up? Make him come into the bank and give a handwriting sample? I can’t recall ever having a bank refuse a properly endorsed check for deposit.
What earthly good is having a checking account at a bank if I can’t put checks into it?
Oh, reading over, I now see where I could have stolen a check from somebody, forged their name, and then signed it and deposited it. :o Not thinking clearly today. Been spoiled by the credit union for too long.
That is strange. Banks are usually not picky when depositing an endorsed check.
However, legally, by signing your name below his, the check was, in effect, made out to you. You were thus trying to deposit the check into his account. It was the same as if you had a check made out to you and someone tried to deposit it into his account. They caught it and went by the book.
If the check is made out only to your husband, you should not sign it.
I don’t think it is so much the order of the signatures, as I understand it, the check was made out to both jointly (rather than alternatively).
Instead, the depositary bank is also likely a collecting bank (unless the dentist drew the check on an account at that same bank). This means that when the depositary bank transfers the check (to either the Fed or the bank directly … I forget the precise mechanics at this stage), the depositary bank necessarily makes certain transfer warranties, including that all signatures on the item are authentic.
We are fine with mandating these warranties because we want banks to be attentive to the checks they accept and the circumstance surrounding their presentment. That is, we want to discourage any inattention or willful blindness by the institution best positioned to suss out fraud.
And, of course, if we are going to mandate transfer warranties, we must also allow banks to say “No dice,” when presented with checks that they have reservations about.
As to how the bank would verify the signature, that depends on the amount of the check (aka the amount of their potential liability) and their knowledge of the customer (if it was a large check and a rarely used account, that might arouse suspicion; on the other hand, a long-standing account without problems would tend to allay many misgivings) and their own judgment. A phone call might suffice. They might require an in-person visit by the husband (“Did you endorse this check?” “Sure did. Here’s my ID.”)
It’s a second party check. Banks used to take them all the time, but recently I have seen pretty much every bank put notices up saying they refuse to accept them. It’s not necessarily a legal thing but a bank policy.
A first party check is one made to you
A second party check would be made to someone else. He endorsed the back with his signature. At this point, the check is really a bearer instrument. This is why they say, never sign a check till you get to thee bank. Anyway, the person signs his name and writes, “pay to the order of,” and your name.
Then you endorse it and deposit it. This is a second party check. A third party check is just one more level.
It was not unusual 20 years ago to see 2nd party checks. Now most banks won’t touch them
I think it’s entirely determined by how well the bank knows their customers. If I walk up to any teller at my bank, they will cash any endorsed check I throw at them without looking up the account it is drawn on or mine to see the available balance.
It helps if you are in a small town, have an unblemished record with negotiable instruments, and everyone knows your name.
Exactly. The rules of endorsement are basically this:
(optional) A type of legal notice. Most common these days is “FOR DEPOSIT ONLY,” which means the check cannot be cashed but only deposited. There can also be something that says, "The undersigned agrees that . … " There are nuances about what a bank can accept (it must be something verifiable by the teller, for instance).
The signature of the person the check was made out to. If there are multiple names, then both names need to appear.
A second party. Once the check is signed, it becomes the same as cash. I can endorse a check and give it to you and you can do whatever you want with it. If you go to deposit it, then you sign your name to endorse it. As** KneeSid** pointed out, many banks have policies so that they don’t cash any second party check. (There can be further signatures, but each one increases the risk from the bank’s point of view).
The once you signed your name on the check – and you weren’t listed as the payee – it becomes a second party check. Banks are reluctant to cash or deposit these. They will make an exception if both names on the check have a joint account, since both names are account holders. But when you handed in the check to the teller, it was technically your check being deposited into your husband’s account. Since you didn’t have an account there, they decided to refuse you.
The credit union may have had different policies, and since it was being deposited into a joint account with your name, they were more lenient.
In my experience, if you deposit a check in an ATM it will invariably go through unless the person who wrote the check later objects to it. It seems if you aren’t physically there to complain to, they simply deposit it and send it along the chain. And once it’s in the system, I don’t believe that virtually humans check it at all. It all works by the magnetic numbers along the bottom of the check.
I’ve had trouble in the past trying to deposit a check made out to both my husband and me, endorsed by both, and me putting it into an account that didn’t have him on it.
Since he wasn’t there with me to assure folks that the disposition of the check was acceptable to him, the bank wouldn’t take it.
I tried to push the transaction, and finally got bumped up to the manager. The answer was still no go.
Even when I stressed that we were married, the bank manager said there was no proof of our relationship as far as the bank knew.
Hubster is retired military, and I offered my dependent’s identification card, which shows me clearly as our spouse. The back of the card even has our wedding date on it, since that is when I became eligible for medical care.
Manager was adamant, according to him, the card was merely to allow me to shop at the Commissary.
You took a check made to both you and your husband - and attempted to deposit into an account in your name only - with only the signature on the back of the check as proof that your husband signed/was aware/authorized it. Add to that that the bank was a ‘rarely used’ account.
I can see several reasons that that would draw suspicion.
The credit union - where you and your husband are joint account holders - accepted it without question.
I’ve found this to be true myself. I’ve only just set up a proper business checking account this year with a DBA and all that, but for the six years prior, clients have occasionally made out checks to my business name instead of my personal name, as I have instructed them to. I’ve deposited dozens of these checks, and not once has it ever gotten kicked back to me. Seems like with ATMs they don’t check unless someone brings it to their attention down the line.
Yes. I recently got a new “disclosure statement” from my bank, full of the usual disclaimers about how they won’t be liable for umpteen-hundred kinds of things that they could f—up. For example, they refuse to be liable if they accept or cash a check dated ten years ago, or if the amount in numbers differs from the amount in words (they might take it at either amount), or many other things they could simply “fail to notice” and they won’t be liable.
They were kind enough to include at bit of explanation: The disclosure explains that these days, like OldGuy says above, a great many checks get handled entirely automatically without been seen or touched by human eyes or talons.
I suppose for some kinds of f-ups that could happen, the bank would make good, the better for PR purposes, or if they clearly screwed up. But they probably wouldn’t take responsibility if something went badly wrong with, say, a ten-year-old zombie check or a post-dated check.