Our financial institution addresses third party checks by describing what they are, and outlining the following requirements for accepting them:
*Prior to acceptance, ANY third-party check must be referred to a Supervisor for approval.
*The first endorsement on the back of a check should be that of the original payee and must be verified by a bank employee. After the payee endorses the check, it may be given to another person, who may then endorse the check for cash or deposit.
* The last signed endorsement on the check must be that of a bank accountholder. If the check is returned to the bank for any reason, this accountholder is held responsible. As the bank is the final endorser on any item we process, the bank guarantees all prior endorsements.
* When there are multiple endorsements on a check and one of the signers is unknown, there are only two ways that the check can be accepted by the bank:
1 - The non-accountholder is present to endorse the check and provide valid identification which we document.
2 - The endorsement of the non-accountholder has been guaranteed by another financial institution. An endorsement guarantee is signified by a bank's placement of an "Endorsement Guaranteed" stamp under the payee's special endorsement on the back of the check.
The opinions expressed are mine and do not necessarily reflect those of my employer.