Depending upon your customer's balances, the size of the check and your bank's taste for risk-taking, attempt to contact the drawee bank using a public telephone listing (not one printed on the check) and verify funds, signatures, and validity.
If you still are concerned, you are left with the choice of accepting the item for deposit and placing a large item hold on the excess over $5,000, or refusing the item for deposit and informing the customer you'll be happy to send it for collection.
If you want to minimize your risk and the check is sizeable, go the collection route.
Answer by Sam Ott:
You can utilize this FRB search feature to determine the institution that corresponds to the routing number of the cashier's check.
Once you have the name of the institution, use the FDIC Institution Directory to obtain more information. Then call the issuer and verify the item.
Answer by Hussam Al-Abed:
In addition to what is mentioned from a procedural point of view, I will be discussing the technical side of cashier's checks:
Cashier's checks are another payment instrument, just like banknotes and credit cards. When your teller, for example, receives a cash deposit, he should check and verify if this cash is forged or counterfeit. Why not do the same with cashier's checks?
Security features are almost the same for banknotes, credit cards, traveler's checks, passports and ID cards. When I do a training course on detection of forgery, I always start the first day with a little quiz by asking all trainees (who happen to be tellers and cashiers who deal with hundreds of thousands of banknotes on a daily basis): What is the picture on the back of the 5 Jordanian dinars banknote? (In your case let it be the US $5 bill.)
Some of them start slipping their hands to their wallets to check!! The idea is: If a teller handles huge amounts of cash on a daily basis, how come he can't remember the picture? (Observation skills alert here!)
You can include the security features of cashier's checks in training and/or design a leaflet or brochure for what the tellers should look for in a cashier's check.
Cashier's checks are the only payment instrument that holds an instruction printed on the back or the face detailing what a teller should look for. Let the tellers make use of that. An observant teller might save the bank thousands of dollars and lots of time & effort too.
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