Check Endorsement and Privacy

Question: I know this question has come up before, but I need to see the answer in print. In our most recent privacy training, several branch managers raised the concern that our policy of requiring a depositor of a check to write his or her account number on the back with the endorsement would violate our depositor's privacy because the account number would be revealed to the drawer of the check. We have the policy as a control to ensure that deposits are credited to the correct account. Can we continue this practice?

Answer: Yes. Having the depositor write his or her account number on the check they are depositing is a wide-spread industry practice. It can be an important protection for the depositor for the very reason you mentioned. Now for the privacy issue. The agencies have taken the position that when one person writes a check to another, they are conducting a business transaction and that both parties accept the consequences of treatment that goes with the transaction. This includes revealing account numbers on endorsements. If you think about it, this isn't such a bizarre conclusion because the party that wrote the check has already shared, so to speak.

Copyright © 2004 Compliance Action. Originally appeared in Compliance Action, Vol. 8, No. 16, 1/04