Question & Answer

Question: I just read the page on endorsements, and I have some questions.

If "A" and "B" have a joint account with us and "A" comes in with a check payable to "A" and "B" and only "A" has endorsed it, can it be put into the account with a "Credited to the within named payee" stamp without "B's" endorsement?

If "A" comes in with a check payable only to "B" and it isn't endorsed, can "A" deposit it into the account?

If an account is only in "A's" name, could "B" or a non-depositor make a deposit into "A's" account?"

Answer: If "A" & "B"'s joint account is titled "A" AND "B" and requires both signatures on any withdrawal or payment, you would be safe in stamping the check. However, if the account is titled "A" OR "B", and either party may withdraw on a single signature, you would be taking a chance. The maker of the check has a right to "proper" endorsement on the item, which means a personal endorsement could be required. Therefore, you would want both "A" and "B" to endorse the check personally.If the check is made payable to "A" OR "B", it is common practice to use your endorsement stamp even without any personal endorsement.

The area of the most difficulty with these checks is IRS income tax refund checks. In the case of a joint husband/wife return, the checks are made payable with an "AND". You should exercise extra caution with these checks. Require both endorsements-always!

It's quite a different matter, however, to accept a check from "A" payable to "B" and bearing no endorsement. If the account is "A" AND "B", there would be no problem, because "B" would have access to the funds. In the case of an "OR" account however, to be safe, if "A" is going to do the banking, there should be a restrictive endorsement on the back of the item-for instance, it should bear "B's" endorsement and the words, "For deposit only to account number..." This is a much better and safer practice than to have "B" endorse it in blank and have "A" carry it around that way. If "A" should lose a check with a simple blank endorsement-(that is just the name of the payee endorsed on the back with no restrictive endorsement)-"A" would lose what would be considered cash. The check could be negotiated by anyone who picked it up.

The last part of your question is easy-no one should be able to make a deposit into a customer's account except the customer-unless the customer has given specific permission to allow it. If the customer has supplied a deposit ticket, it might be implied permission. (Remember our story of the folks outside Fairbanks, Alaska that send in one person from town to do all the banking?) Under any other circumstances, you might want to check with the customer. Letting someone, particularly a non-depositor, tamper with a customer's account is almost a sure way to a lawsuit.

Copyright © 1993 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 4, No. 3, 8/93