|
|
|
 |
Compliance Gurus
Lending Gurus
Security Gurus
Marketing Gurus
Technology Gurus
eBanking Gurus
|
Accepting Deposit of Third Party Checks
by John Burnett, BOL Guru
BIO AND CONTACT INFO
Question: There seems to be some confusion at our bank concerning depositing third party checks into a customer's account when the check being deposited is not made payable to the account holder. I could think of very many issues surrounding this such as potential fraud and liability issues; however, am unaware of any laws (such as UCC) which would regulate this.
Answer: It all boils down to managing the risk. How well do you know your depositor, and how confident are you that your depositor will be able to cover any checks that might be returned for forged endorsements?
Think about supermarkets or other merchants that cash paychecks for their customers (leaving professional check cashers out of the discussion for a moment). You've probably accepted third-party checks in their deposits for years, and you haven't been burned. That's because these businesses don't do a major portion of their business this way, and they have the "staying power" to cover losses.
When you have a customer that does a major portion of business in cashing or otherwise accepting third party checks, your risks grow.
Know your customer. Know their strengths and weaknesses. Know about their business. Then decide on the risk.
First published on BankersOnline.com 09/15/03
Home | Compliance | Lending | Operations | Security | Marketing | Technology | eBanking
BOL Archives Privacy Policy Important Disclaimer Recommend This Site ! Contact Us
BankersOnline is a free service made possible by the generous support of our
advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all
banking professionals. Support our advertisers and sponsors by clicking
through to learn more about their products and services.
|
|
|
Print Friendly!
Email This Article!
Discuss NOW!