Thanks for the welcome.
Neither. I went to a Ninja Prep school, and made head ninja my seventh year. I have still the pin around somewhere.
I don’t see a guitar. Poseur!
He’s the ninja with the dirty knees. And do keep us informed, please.
No, your answer to number 4 doesn’t apply in this case. If someone finds one of my “cash this check to agree to this loan” checks and deposits it in my account without my knowledge, how can I be held liable? Am I required to notice a sudden increase in my bank account and investigate it so I can tell the lender I don’t want it?
Actually no , Trans Canada Credit issued a raft of them back in the late eighties or early nineties , I am not sure if it got them into trouble, but the major networks were warning people that these were not free money , but actual loans at a fixed interest rate that you agreed to when you cashed it.
Declan
On whatever checks I’ve seen like this it says “BY ENDORSING AND DEPOSITING THIS CHECK YOU AGREE…” not “BY DEPOSITING THIS CHECK…” I always thought that if one were to simply deposit it without endorsement it would bounce.
In the US, it seems every cheque has a panel on the back where it’s supposed to be endorsed, tho I am never sure of the circumstances as to when this has to he used. Agree, this is never the case here in Australia.
I was interested to read missbunny’s recent post, as I regularly get US cheques here in Australia, and my bank insists on them being endorsed (signing the back), or they will not process them. I never understood why, but I want my money so I play along.
Maybe I should rock the boat, eh?
Gozu please do let us know what happens here.
My understanding is that a check is essentially “A promise to pay” from person A(who writes out and signs the check) on behalf of person B (who the check is made out to). The endorsement box on the back is for the use of person B to indicate what to do with the check. They can reassign it to somebody else by writing “To the order of Blah blah” and signing it, they can just sign it, which is like assigning it to anybody(anybody with a check endorsed by just a signature would be able to write in their name on top and cash it), or they can write “For deposit only” and deposit it into THEIR account.
When you don’t write anything into that box, the bank may but will not necessarily supply an endorsement for you. WHen you just sign it and drop it into the ATM, the bank will put their stamp on the back using your signature and their stamp to endorse it over to themselves. So it’s always best to write your account number and sign on the back when depositing, not just sign, in case somebody else gets ahold of the check.
In this case, his mother is most likely just filling out a deposit slip and writing “For deposit only” on the back and dropping it into a deposit box at the bank. In the particular circumstance of a loan check, I would guess that even though the money is going to him, his mother is agreeing to the loan contact, but IANAL.
Yes, as I understand it, you have a legal responsibility to know what’s going on in your bank accounts. If $4k suddenly appears out of nowhere, it’s up to you to investigate.
However, in the case of someone, say, taking the check from your mailbox and depositing it out of spite (let’s say you kicked their dog or something), knowing you’d be signed up for a $4k loan at 300% APR as a result, and you didn’t notice because you keep a $500k balance and get auto-deposits from several sources and you don’t regularly balance your books, then I’d say you have a good case. Under those circumstances, if you took measures to void the loan when you received your first notice from the lender, you’d probably prevail easily.
If, however, your beloved aunt Sophie deposited the check into your account, you keep an average $300 balance, your auto-deposited paychecks are around $1k, and records show you went to an ATM and did a balance check before withdrawing 20 bucks which showed the $4k spike, and you did nothing, you’d likely be in for a rougher road if you failed to investigate the anomalous income, then protested the loan.
Are you kidding? He’s the perfect mark for some loan companies. Some companies love people with bad credit, so they can get away with charging outrageous intrest rates. If you roommate is in bankruptcy, and these are loan checks, I would not be at all surprised to find out the APR is at or around 25%.
Correct, and to some lenders the fact that you can’t file for Bankruptcy (again) for a number of years is music the their ears.
Another side thought;
What’s to stop someone from having their mom sign these checks and then play stupid with the knowledge of the fine print all the while spending the money?
Some have said that you aren’t responsible for a contract that you didn’t sign, but I think you automatically become party to the contract when you take advantage of the services it provides. Signature or not. Otherwise, they may come after you for fraud.
My answer does apply, but I agree that I should have expanded on it. You (as the innocent and unknowing account-holder/payee on the check) would not be liable in contract under your scenario (because you didn’t sign the check and there’s no possible agency under your facts), so you wouldn’t be liable for any interest, but you wouldn’t be allowed to keep the money that was wrongfully put in your account. Yeah, there’s a couple arguments that I could make in your favor on this point, but they’d be fairly extreme longshots.
Also, I’m not forgetting that I owe someone else a response in this thread - just haven’t had time to do it, because it’ll be fairly time consuming, unless I can find a good summary through google.
{repeat earlier disclaimer}
Yes, you can generally accept an offer (and thereby form a contract) through your actions, even without a written signature or verbal assent. Spending the money might be enough to trigger this.
But I have to dispute your last comment. Fraud for just spending the money? No. (I don’t mean to single out you. But too many people throw around the word fraud without having any idea what it means. Not every bad or dishonest act is fraud.)
Under common law, fraud generally requires a knowing misrepresentation of a material fact by the defendant, which the defendent intends the plaintiff to rely upon, which the plaintiff does rely upon, which reliance is reasonable under the circumstances, and which results in damages to the plaintiff.
I happened to deposit a cashier’s check into my account the other day. They had a hold period, which surprised me. The banker told me that they (and other banks) get a weekly flier from the FBI with recent banking scams listed, and there has been a huge upsurge in the number of forged and fraudulent financial instruments running around. He said that the main reason is cheap, high-quality scanners and printers, which make forgery a lot easier. Because of all the additional security crack-downs going on now, he said most banks are just going to a policy of having a hold period on everything.
Also, regarding who can do what with whose account, I think there’s a little leeway. I know that my mom can walk into her small-town bank, where she knows the tellers by name and has banked for decades and do all kinds of transactions involving my sister’s account, on which she does not officially appear. (My sister has her do things from time to time, as she owns a small business and travels a lot, and sometimes needs someone to run in and see to something.) I, despite the fact that I probably babysat for the tellers’ children, or went to school with them, and am also known to the tellers, probably could not even get them to acknowlege that my sister has an account there. (I haven’t tried, obviously.)
Here in St. Paul, I had a slight go-around with my bank. It is a small, neighborhood bank, and everyone knows me by name. My MiL sent a birthday check to my daughter, age 4. Since DD has her father’s last name, not mine, they regretfully told me that they couldn’t allow me to cash the $25 check (she doesn’t have an account to deposit it into), even though they know her by name and give her lollipops when she visits them. (This was easily solved - her dad cashed the check at his bank.)
Thanks for the info. My reference to fraud was tied into the opening part of that post; What’s to stop someone from having their mom sign these checks and then play stupid with the knowledge of the fine print all the while spending the money?
Basically, using your mom as an unwitting accomplice to getting the money and then trying to back out after you’ve spent it.
Isn’t this a problem? I mean, it would take some time for the lender to realize what happened, and then some more time for them to show that the money was wrongfully deposited (how would that actually play out, anyway?), and all the while you’ve had $50k of their money to fiddle with, then you just give it back and there’s no hard feelings (or worse, withdraw it and skip town)? Seems like a scam waiting to happen.
So the OP says that there is a second check, not yet deposited. It seems the whole mystery could be cleared up by just knowing who the check is from. Any info?
That’s what I was wondering as well. Forget the issuing bank, find out who exactly sent the check and find out what happened.
One other thing I’ve been wondering throughout all this. If you deposit a check, how long does the issuer have to ask for the money back? Surely there must be some time limit after which the money’s yours by default?
Growing up (well, getting older) I had 2 friends that got “free money” and they both suffered for it later.
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He got a student loan check for way more than it should have been and nobody caught it so he cashed the check and partied like mad, then the demand letters began showing up. In the end it would have been condiderably cheaper to have partied on a credit card.
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He was due a tax refund and when it showed up the check was for $8,000.00 instead of the correct amount $800.00 so he blew it, when the IRS caught the mistake they charged him interest and some big penalties. I know that with an attorney he and his Father were able to get the bill cut down to “only” ~ $9,600.00.
Your buddy owes some money back but don’t worry too much as I’m sure a nice payment plan can be worked out (ouch!).
Unclviny
Well in the U.S. you have to sign the back of the check you’re depositing in order to cash it. If you don’t you get the check back.
That’s why this story smells fishy to me.
You can deposit CASH in someone else’s account, or your OWN check, but not a check made out to another person which requires their endorsement.