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#2181773 - 06/14/18 02:24 PM Missing Endorsement-Bank Error
deh Offline
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Joined: Mar 2006
Posts: 866
I have been searching and unable to find my answer. This is not my line of expertise and I have been out of the deposit side of banking for a while.

Our bank accepted a third party insurance check that was made out to our 2 joint customers and to a bank, not us. What is the proper way to correct the error if the bank deposits the check without all endorsements?

We did place a HOLD on the transaction as it was a large deposit; however, the insurance company has yet to return the check for "Missing Endorsement".

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#2181776 - 06/14/18 02:32 PM Re: Missing Endorsement-Bank Error deh
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
It could come back for three years - a hold is useless.
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#2181777 - 06/14/18 02:33 PM Re: Missing Endorsement-Bank Error deh
Elwood P. Dowd Offline
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Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Insurance companies oftentimes issue "drafts" not "checks." They need not comply with the midnight deadline; i.e. the item may be a long time coming back to you. A Regulation CC hold for a missing endorsement that was applied after the deposit was accepted is questionable because the defect was obvious at the time the deposit was made. In any case a hold attributed to Reg CC cannot last in perpetuity.

Talk to your bank's legal counsel. He or she will probably want to reach out to the insurance company (now) and then the bank whose endorsement was required. What they want will be "fact driven," but you are going to hold on to the funds either way.

You may not feel "lucky," but it is very fortunate that someone caught this.
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#2181782 - 06/14/18 02:43 PM Re: Missing Endorsement-Bank Error deh
deh Offline
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Joined: Mar 2006
Posts: 866
Thank you.

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#2181790 - 06/14/18 03:04 PM Re: Missing Endorsement-Bank Error deh
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
Ken - just for clarification - I thought a "draft" was defined as a check in Regulation CC and was subject to the expedited return rules. Although, not for an endorsement issue of course. smile
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