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#1854271 - 09/20/13 06:36 PM Pre-approved signature on checks
Tn Auditor Offline
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Joined: Nov 2005
Posts: 77
We have a business customer printing its own checks. The signature line reads "Account Holder Has Pre-Approved This Check". What concerns, if any, should we have with this? I would appreciate your opinions.

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#1854354 - 09/20/13 08:28 PM Re: Pre-approved signature on checks Tn Auditor
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
That sort of thing is usually seen only on checks that the payee draws on the payor's account -- remotely created checks. Is your customer perhaps issuing checks drawn on other persons' accounts at other banks in a telephone sales mode?

If your customer has printed that (or had it printed) on his/her/its own checks, there are some real concerns unless there's some sort of agreement between the customer and the bank that you'll honor them. That's an agreement I would not suggest you approve, by the way. Using that legend in place of a signature is an invitation to forgery and all sorts of fraud, and presents a real financial control concern for the business itself.

If I were in your shoes, I'd make it clear to the customer quickly that you won't knowingly pay checks without an agreed-upon signature. If the customer won't back away from this misguided attempt at "efficiency," I'd suggest he look for another bank.
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#1854459 - 09/23/13 01:15 PM Re: Pre-approved signature on checks Tn Auditor
Tn Auditor Offline
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Joined: Nov 2005
Posts: 77
Josh, Thank you. It does appear these checks are through some remote deposit or bill pay service. The checking account is a husband/wife account, but the printed name on the checks is a business, a real estate service. The checks are payable to an individual, (Donna W. ex-wife?) and memoed as child support. Donna brought the check in to cash at a teller window. The teller wouldn't cash it because of the lack of a signature until she got supervisor approval.

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#1854472 - 09/23/13 02:09 PM Re: Pre-approved signature on checks Tn Auditor
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
So, the account is a joint account owned by spouses, the printed name on the checks is a business (real estate service), the payee is an individual who isn't an account owner, and the stated purpose is child support. And the check isn't signed, but instead bears that ridiculous statement of pre-authorization.

I sincerely hope that supervisor approval was not forthcoming.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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#1854573 - 09/23/13 04:57 PM Re: Pre-approved signature on checks Tn Auditor
Tn Auditor Offline
Member
Joined: Nov 2005
Posts: 77
Unfortunately, the teller supervisor (who is not me) approved cashing the check because the payee also has an account with us. It came to my attention last Friday afternoon.

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