A check that has been written to be payable to one person that is endorsed by that person to a third party is called a third party check. There is no law requiring banks to accept third party checks. National banks set their own policies whether or not to accept third party checks and set their own rules as to the policy necessary to cash a third party check. Signing over a check may be as easy as having the payee endorse (sign) the back of the check, while the person cashing the check will sign below this signature. Some institutions require that the third party to whom the check was endorsed hold an account with them to ensure the funds if something goes wrong. Other banks will require that the payee be present to verify the endorsed signature. Fraud Alert Be aware that endorsing third party checks has become a fraudulent activity. One scam involves a buyer purchasing a product from a private party and attempting to pay with a check made out to the buyer for more than the item is worth. The buyer will then sign the check over to the private seller and ask for change. [...]
↧