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#134522 - 11/26/03 02:44 PM honoring checks
Anonymous
Unregistered

Please advise.
Corporate A has an account with us. Corporate A's employees cash their checks at our bank, checks are drawn from our bank. Corporate A does not want us to cash these checks unless the employee has an account with us...!
My opinion is that unless there is a stop payment on the check, we would honor on-us checks as long as funds are there and we have a proper ID.
Opinions??
Are there any regulations that would require us to cash these checks??? Apparently,we want to keep our corporate customer happy and if there are no restrictions, we will do what they tell us.
Thanks for your help.

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#134523 - 11/26/03 03:31 PM Re: honoring checks
Suwannee Offline
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Suwannee
Joined: Jun 2002
Posts: 641
Florida
What difference does it make to the company as to whether or not the employee has an account with the bank? It would seem that the employer would want their employees to have access to cash their checks at the bank to make it easier for the employees.

Maybe the employer is having cash flow problems and believes this will slow down the immediate flow of funds from the account if the employees cash their checks at banks other than where the account is being held????
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#134524 - 11/26/03 03:47 PM Re: honoring checks
Anonymous
Unregistered

If the funds are there, and you present proper ID, don't you think we have to cash these on-us checks?
I understand if the customer puts a stop payment.. then we would not cash them..

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#134525 - 11/26/03 03:51 PM Re: honoring checks
RBanker Offline
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RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
First of allyou are only required to cash checks for your customer on their account - anything else you do, you do as a courtesy, etc. Some mega-banks have taken this to an extreme and now charge an ungodly fee to cash payroll checks if the company employee is not a customer - Smacks of discrimination to me, and some states are fighting this in court.
In this situation this sounds like a very strange request and I think I would want to know about their motives for making this request.
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#134526 - 11/26/03 04:05 PM Re: honoring checks
JacF Offline

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Joined: Nov 2001
Posts: 6,719
PA
I can't see any good that could come out of honoring this request. As was earlier mentioned, it sounds like Corp A may be trying to manage a cashflow problem. And the solution they're asking for only treats the symptoms- not the disease.

Furthermore, it is apparently your bank's practice to cash on-us checks for non-customers. If you honor this request, woudl you change your policy to apply to all non customers, or just those employed by Corp A. The former would likely result in backlash from other customers whose checks are not honored. The latter would only affect a select group of people, which could be seen as disparate impact at best- and outright discrimination at worst.

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#134527 - 11/26/03 04:14 PM Re: honoring checks
Don_Narup Offline

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Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
Quote:

First of allyou are only required to cash checks for your customer on their account - anything else you do, you do as a courtesy,




Wait a minute here. Its called a DDA or demand deposit account. I make demand at the counter, customer or not, and if no stop payment, good funds, proper ID etc YOU LEGALLY MUST CASH THE CHECK. If not your are showing preference to creditors, which means the bank is selecting which items get paid out of the order in which DEMAND is being made. That is not legal folks.

The notion that non customers should be penalized for walking in the door and cashing checks seems to be gaing momentum but PLEASE PLEASE do not even believe they have no right to do so, and that you have no obligation to negoiate checks for non customers.
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#134528 - 11/26/03 04:30 PM Re: honoring checks
Anonymous
Unregistered

Don, we had a situation where a "nasty" non-customer wanted to cash checks drawn on us. We refused to honor the checks, due to his verbal harrasment of our tellers. So in some situations, if there is sufficient justification, you can refuse to cash checks drawn on your bank. In the situation I explained, we even banned the guy from bank property, and threatened to call the Police if he set foot on bank property.

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#134529 - 11/26/03 04:36 PM Re: honoring checks
Anonymous
Unregistered

ok, now that I know more I will share it with you. These are counterfeit checks. The signature matches.. and if proper ID was given, we cashed them...
now, the company as I said earlier wants us to cash only if the employee is a customer ( I guess, so that we can chargeback to the employee's account and pay the corporate account)...
What should we do?
Thanks.

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#134530 - 11/26/03 04:42 PM Re: honoring checks
RBanker Offline
Power Poster
RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
My gosh, if I knew these were counterfeit checks I certainly wouldn't be cashing them for ANYONE!!!! - I would also probably notify law enforcement if one was presented. This company sounds a little whacked to me! I mean, if they are in possession of counterfeit checks, wouldn't that indicate some potential knowledge of the crime (at the very least, who gave them the checks)?
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#134531 - 11/26/03 04:50 PM Re: honoring checks
Don_Narup Offline

Power Poster
Joined: Jul 2001
Posts: 3,708
Las Vegas Nevada
Tom
You certainly can expect to conduct business in a business like manner and refuse to do business with anyone, customer or not, that is abusive. I have personally escorted a few jerks to the door, and went and made a cashiers check for the balance in the account and told customers they don't bank here anymore, when I managed offices. Thats a lot different than refusing to cash a check just because they don't bank with you.

As far as the situation cited with counterfeit checks. There are options which should be instituted immediately. Change the style of checks and get another account opened with a different account number. If the counterfeit continues the account officer needs to have a heart to heart with the corp officers about setting up another process.
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#134532 - 11/26/03 05:29 PM Re: honoring checks
JacF Offline

Power Poster
Joined: Nov 2001
Posts: 6,719
PA
Quote:

ok, now that I know more I will share it with you. These are counterfeit checks. The signature matches.. and if proper ID was given, we cashed them...
now, the company as I said earlier wants us to cash only if the employee is a customer ( I guess, so that we can chargeback to the employee's account and pay the corporate account)...
What should we do?
Thanks.


1)Close the account and open a new one.
2) Find out which checks are bogus, and to whom they are payable- then get this information to the frontline staff.
3) Offer positive pay service to your customer.
4) Educate your customer about internal controls that can keep this from happening again.
5) If you end up eating the loss on any of these items- prosecute! If not, encourage Corp A to prosecute.

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#134533 - 11/26/03 05:45 PM Re: honoring checks
Skittles Online
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Skittles
Joined: Sep 2002
Posts: 13,963
TN
I'm also curious as to how the signature matches. Does Corp A have signed blank checks laying around where someone can get them?

What about using Positive Pay?
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#134534 - 11/27/03 01:06 AM Re: honoring checks
RFitzpatrick Offline
Gold Star
RFitzpatrick
Joined: Apr 2002
Posts: 424
Pacific NW
I'm with Jac on this one. If your customers account has been compromised it needs to be closed. Besides the discrimination issues, by making such concessions your customer is transferring all the liability over to your bank should one of these checks get through. Be helpful, pay for new check stock if necessary, and help with the transition, but don't set yourself up for a bigger hit down the road.
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