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Non-customer Deposits Into Customer Accounts

Question: Can a person who does not have an account with our bank, and is not a signer on our depositor's account, made a deposit into our depositor's account? We had a situation arise regarding a deposit to a checking account without the account holder's knowledge. The person wanting to make the deposit did not have an account with our bank. The check that she wanted to deposit was a two party check. I seem to recall this type of situation being discussed in your loss prevention seminar. Could you refresh my memory on the problems with accepting deposits into an account by someone other than the account holder?

Answer: Your contract with your depositor says you will honor checks properly written by him and you will accept deposits and collect them on his behalf. If you allow anyone else to make a deposit into that account, who is not a signer on the account, you're opening yourself to a great deal of liability. You may remember the illustration I used of an antique dealer who was told the $900 check he was presenting was "...not quite good." Upon questioning, the teller managed to reveal that the account was short by $20. The antique dealer took a blank deposit ticket out of the lobby counter and deposited $20 cash into the account. He then cashed the now good $900 check. Our depositor sued the bank for invasion of privacy, release of information on the account without subpoena, allowing tampering with the account, etc.…and won.

The popular author, Sidney Sheldon, in a book called "If Tomorrow Comes", used the depositing of funds into someone else's account to set them up for a criminal charge of fraud. The perpetrator in this case took numerous blank deposit tickets out of the lobby desks, put on the account number of her "victim" on each deposit ticket, and replaced them in the lobby counter. Unsuspecting customers using the deposit tickets saw a number already on there and used them, thinking it was a deposit to their own account. The scam was easily understood by millions of readers. When the book became a best seller in 1984, it was the reason many of our financial institutions removed the blank deposit tickets from their counters!

One of our legal advisors, Mary Beth Guard, came up with a couple more interesting scenarios:
Suppose Floyd deposits a check into Trudy's account. The check he deposits is no good. It is returned by the payor bank 'NSF' or 'account closed' or another valid reason. Trudy's account then gets assessed a fee by her bank. Trudy protests the fee because she didn't make the deposit - and perhaps didn't even know about it. She claims Floyd is a former boyfriend who lives to stir up trouble for her.

Suppose David is running for governor on a strong gun control platform. The bank allows a representative of a militia group which is vocal about the right to bear arms to deposit a check written by it to David into David's fund raising account. The rep then leaks to the press that Mr. Gun Control is a two-faced liar who has accepted campaign donations from groups who oppose gun control. Most financial institutions now require a person to ask a customer service representative or a teller for a blank deposit ticket, and to identify themselves as a signer on the account. We break our own rules sometimes when we KNOW ALL of the people involved. A grandparent depositing into a grandchild's account, for instance. Or covering checks for a son or daughter who is out of town and unable to make deposits electronically. These instances are few and far between. In the transaction you describe, it could be very dangerous for you to accept any check for deposit, let alone a two party check, from an unknown person into one of your depositor's accounts.

Copyright © 2002 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 12, No. 2, 2/02




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