3RD party checks

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I had a few 3rd party checks that have been endorsed by the person the checks are made out to. I tried to DEPOSIT them today at my local Capital One branch.
They took them "this time" but gave me a hard time about them.

I always thought that you could deposit them at banks,
I closed my Cap One account right there on the spot.

what do people here do?

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My local bank (Bank of the West) takes them without any problems. I hope you have an alternative now that you closed the Capital One account... I wouldn't have burned that bridge in advance. More constructive to politely ask their preference: "cash the check" or "close the account".

Thanks for the advice, I have several other accounts that I can utilize. I only opened the account to take advantage of a signing bonus.
I haven't ever had problems at the other banks that I have accounts in... (TD, Chase, or ING)

I just went through a similar issue with two banks (Capital One and M&T). I was trying to deposit a check made out to me and my wife, which she had endorsed. Neither would accept the deposit without her present. I was able to convince M&T to call her for verbal approval (they had her confirmed number as she also has an account there). I was told that the only way to deposit a check like this was to authorize her on my account (or vice versa). We have shared accounts but not at these banks.

As in the case of the OP, I've often had people endorse with "pay to the order of Sackajacka" and was able to deposit.

I have never had an issue with these issues before (at many different banks) as long as I had an established account history. Both told me that the concern was liability that the other party actually hadn't endorsed the check (or with the intent for me to deposit) and that it opened them up to liability. They both claimed that this was a long time policy. It may be, but they never gave me grief about this previously. I assume that the prevalence of check scams has made them crack down on these things more.

Next time, use an ATM to make the deposit.

HSBC teller took a 3rd party check without issue, but it was returned to me. Reason given: fraud. Amount was ~2k. Would have pursued it more if it was a personal check, but I just expensed the $10 fee + interest charged.

So, ATM accepting it doesn't mean you are in the clear. Good thing it wasn't $35.

I've never had a problem with a 3rd party check in the ATM. Been denied a few times in the lobby, but never had a peep from the ATM checks deposited.

samiam68 said:   Next time, use an ATM to make the deposit.This. What's more, CapitalOne has such machines.

I have this issue with my banks once in a while. They have no right to reject a properly endorsed 3rd-Party check. A check is a negotiable instrument, and under the Uniform Commercial Code may be endorsed to someone else. Actually there can be multiple endorsements.

Recently I had to put a friend's settlement check (about $100,000) through my account. It was properly endorsed (Pay to the Order of XXXXXXXXX, and signed by him). The bank mailed it back to me. I mailed it back to them pointing out that under the UCC, this was a properly endorsed negotiable instrument. (By the way, I teach a UCC course in a local paralegal program).

They deposited the check the second time, with a 10-day hold due to "possible fraud" -- which was fine with me. The check of course cleared.

I think some banks or even just branches of banks have decided they don't want 3rd-Party checks. They have no choice if the check is properly endorsed -- whether it's a 3rd-party or 4th-party or 5th-party check -- any more than they can decide they don't want to accept $100 bills for fear of counterfeit currency.

Just remember to make sure the endorsement from the original payee reads: PAY TO THE ORDER OF (YOUR NAME) and then the payee's signature. Sometimes this is done backwards (signed first). They can put a reasonable hold on the funds, but they have to accept the negotiable instrument. Just say: "This is a properly endorsed negotiable instrument under the Uniform Commercial Code, and you can't refuse to deposit it." That should do the trick.

More on the subject: http://www.ehow.com/list_6326718_requirements-party-check-u_s_-b...

rsmo2222 said:   

Just remember to make sure the endorsement from the original payee reads: PAY TO THE ORDER OF (YOUR NAME) and then the payee's signature. Sometimes this is done backwards (signed first). They can put a reasonable hold on the funds, but they have to accept the negotiable instrument. Just say: "This is a properly endorsed negotiable instrument under the Uniform Commercial Code, and you can't refuse to deposit it." That should do the trick.

More on the subject: http://www.ehow.com/list_6326718_requirements-party-check-u_s_-b...

Not really true unless bank can verify endorsement by the payee.

I thought so too.... THANKS.

Forewarned is forearmed. (at least for next time....)
Shocked the heck out of me too....

EvilCapitalist said:   rsmo2222 said:   

Just remember to make sure the endorsement from the original payee reads: PAY TO THE ORDER OF (YOUR NAME) and then the payee's signature. Sometimes this is done backwards (signed first). They can put a reasonable hold on the funds, but they have to accept the negotiable instrument. Just say: "This is a properly endorsed negotiable instrument under the Uniform Commercial Code, and you can't refuse to deposit it." That should do the trick.

More on the subject: http://www.ehow.com/list_6326718_requirements-party-check-u_s_-b...

Not really true unless bank can verify endorsement by the payee.


No, true. Checks are negotiable instruments. The bank will not CASH a 3rd-party check. It must deposit it and is entitled to put whatever hold (up to 30 days) they would like on the funds. Really.

rsmo2222 said:   EvilCapitalist said:   rsmo2222 said:   

Just remember to make sure the endorsement from the original payee reads: PAY TO THE ORDER OF (YOUR NAME) and then the payee's signature. Sometimes this is done backwards (signed first). They can put a reasonable hold on the funds, but they have to accept the negotiable instrument. Just say: "This is a properly endorsed negotiable instrument under the Uniform Commercial Code, and you can't refuse to deposit it." That should do the trick.

More on the subject: http://www.ehow.com/list_6326718_requirements-party-check-u_s_-b...

Not really true unless bank can verify endorsement by the payee.


No, true. Checks are negotiable instruments. The bank will not CASH a 3rd-party check. It must deposit it and is entitled to put whatever hold (up to 30 days) they would like on the funds. Really.
That's a common misconception based on "I read it on the internet" or this is what UCC talks about - someone read about it on the internet.

If a payee endorsement signature cannot be verified, bank does not have to honor the check. That's why sane banks won't cash any of the "Joe Six Pack signature - pay to the order of my Coke Dealer, Joe Six Pack checks" unless the Joe Six Pack with an ID comes to the bank to endorse the check in front them.

EvilCapitalist said:   rsmo2222 said:   EvilCapitalist said:   rsmo2222 said:   

Just remember to make sure the endorsement from the original payee reads: PAY TO THE ORDER OF (YOUR NAME) and then the payee's signature. Sometimes this is done backwards (signed first). They can put a reasonable hold on the funds, but they have to accept the negotiable instrument. Just say: "This is a properly endorsed negotiable instrument under the Uniform Commercial Code, and you can't refuse to deposit it." That should do the trick.

More on the subject: http://www.ehow.com/list_6326718_requirements-party-check-u_s_-b...

Not really true unless bank can verify endorsement by the payee.


No, true. Checks are negotiable instruments. The bank will not CASH a 3rd-party check. It must deposit it and is entitled to put whatever hold (up to 30 days) they would like on the funds. Really.
That's a common misconception based on "I read it on the internet" or this is what UCC talks about - someone read about it on the internet.

If a payee endorsement signature cannot be verified, bank does not have to honor the check. That's why sane banks won't CASH any of the "Joe Six Pack signature - pay to the order of my Coke Dealer, Joe Six Pack checks" unless the Joe Six Pack with an ID comes to the bank to endorse the check in front them.


Correct, the bank will generally not CASH a 3rd-party check. We are not talking about CASHING 3rd-party checks, we are discussion DEPOSITING them.



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Actually, I need to correct myself. The bank can only place a seven business days hold on "suspicious" checks (i.e. 3rd-party).

I'm not going to engage in an ongoing debate with Evilcapitalist. My posts are not based on "I read it on the internet..." or "This is what the UCC talks about - someone read about it on the internet." I'm an attorney with over 25 years of experience. If you check your state's version of the UCC you can read all about negotiable instruments and proper endorsements. End of discussion, please.

Reg CC has nothing to do with what you are describing. Reg CC will be applicable after the check has been accepted i.e. after a payee signature had been authenticated as likely to be of a payee. Since bank has no way of validating payee on the check deposited into a 3rd party account, every sane one of them would reject it.

For the fun of it, try to deposit properly endorsed check written to a corporation into your personal bank account and you will see why you description of what happens is rubbish.

EvilCapitalist said:   Reg CC has nothing to do with what you are describing. Reg CC will be applicable after the check has been accepted i.e. after a payee signature had been authenticated as likely to be of a payee. Since bank has no way of validating payee on the check deposited into a 3rd party account, every sane one of them would reject it.

For the fun of it, try to deposit properly endorsed check written to a corporation into your personal bank account and you will see why you description of what happens is rubbish.
I have deposited a few checks made out to my corporation into my personal checking account.

The checks were refunds of security deposits months after I had closed down the corporation and closed out the corporate checking account.
The deposit was made at the branch where I had my personal and corporate accounts and I was known by the tellers and the bank manager.

mikeres said:   
The deposit was made at the branch where I had my personal and corporate accounts and I was known by the tellers and the bank manager.
That's all that really matters. I can deposit anything I want at my local BofA. But out of state, I wasnt able to deposit a check at BofA that was made out to my sister when she was standing right next to me. They cited the Fed outright prohibiting third-party checks as the reason - I didnt have time to stand there and argue.



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