Skip to content
Thread Options
#1897620 - 02/14/14 10:49 PM Split Deposit into Unrelated Accounts
Auditor412 Offline
Joined: Jun 2011
Posts: 51
Midwest, United States
Is it common practice to allow the following situation? Customer A brings in a check for $75,000 payable to him and wants to deposit $3,000 into his own personal checking account and $72,000 into another customer's personal checking account, Customer B, whom he does business with. The check is made out to Customer A only - Customer A endorses and the deposits are made. Customer B is present during this transaction and both are well known customers. Am I wrong in thinking this shouldn't have been done? I can think of a few risks, can others provide their knowledge on the situation so I can explain this to management.

Return to Top
Deposits and Payments
#1897623 - 02/14/14 11:00 PM Re: Split Deposit into Unrelated Accounts Auditor412
BrianC Online
Power Poster
Joined: Nov 2004
Posts: 6,364
The risk is Customer A come back to you 2 years from now and claims that the funds were not deposited correctly and you have no paper trail to prove otherwise.

Customer A should deposit the entire check into Customer A's account (bank places a Reg CC hold if you so desire) and writes a check for $72,000 payable to Customer B.

It's just better accounting.
Sola Gratia, Sola Fides, Sola Scriptura, Solus Christus, Soli Deo Gloria!

Return to Top
#1897652 - 02/15/14 04:16 PM Re: Split Deposit into Unrelated Accounts Auditor412
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Agreed, no "rules" were violated it's just not a good idea.

*If the check bounces, you have the endorsement (obligation) of only one of the parties, the one in whose account you put the lesser amount of money.

*I doubt you would have done it if customer B had not been present. However, a teller who watched you do it might not have realized that and the take away that he got was that it's not a problem. (I've led other tellers down that primrose path more than once.)

*Customer A paid Customer B $72,000, but yet has no receipt for it. If there's ever a dispute between them over the payment your bank will be involved in the proof.

Next time, Customer A can just write Customer B a check and leave you out of it.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top

Moderator:  John Burnett