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#56 - 11/17/00 09:18 PM Cashing of Government Checks
rfujio Offline
New Poster
Joined: Nov 2000
Posts: 10
Middletown, CT
I was wondering if other users could tell me if they cash government checks for non-customers. I have yet to find legislation that makes this mandatory upon banks and we are in the process of rewriting our check cashing polocies. I am from a bank in CT; governed by FDIC. Many thanks for your help!

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#57 - 11/17/00 09:24 PM Re: Cashing of Government Checks
Mary Beth Guard Offline
Platinum Poster
Mary Beth Guard
Joined: Oct 2000
Posts: 797
Oklahoma City, OK
Although it has been talked about for several years, there still is no federal legislation that requires financial institutions to cash government checks for noncustomers. Your policy could therefore provide that you will not cash government checks for noncustomers (meaning they will have to go elsewhere), or it could state that you will cash them only if certain forms of identification are provided (and you would want to make the types of ID as foolproof as possible, although I recognize that almost anything can be counterfeited), or your policy could state that the ID must be furnished AND you will charge a fee.

Whatever you decide, realize that this is an activity fraught with risk. If the person who cashes the check turns out to not be who they say they are, the treasury department can come back against your bank, since the endorsement will have been forged, and you will have little recourse.

When you cash a government check for a noncustomer


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#58 - 11/20/00 12:53 PM Re: Cashing of Government Checks
rfujio Offline
New Poster
Joined: Nov 2000
Posts: 10
Middletown, CT
Thank you for the fast reply. This information is very helpful to us. Thanks and have a nice holiday.

quote:
Originally posted by Mary Beth Guard:
Although it has been talked about for several years, there still is no federal legislation that requires financial institutions to cash government checks for noncustomers. Your policy could therefore provide that you will not cash government checks for noncustomers (meaning they will have to go elsewhere), or it could state that you will cash them only if certain forms of identification are provided (and you would want to make the types of ID as foolproof as possible, although I recognize that almost anything can be counterfeited), or your policy could state that the ID must be furnished AND you will charge a fee.

Whatever you decide, realize that this is an activity fraught with risk. If the person who cashes the check turns out to not be who they say they are, the treasury department can come back against your bank, since the endorsement will have been forged, and you will have little recourse.

When you cash a government check for a noncustomer



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#59 - 11/27/00 02:14 PM Re: Cashing of Government Checks
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,704
Cape Cod
As with almost EVERY question, one caveat: Check state law. Some states require that banks cash certain types of government checks for non customers under certain conditions.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#60 - 11/28/00 04:52 PM Re: Cashing of Government Checks
rfujio Offline
New Poster
Joined: Nov 2000
Posts: 10
Middletown, CT
Thanks John - I have been working on this today including the cashing of State issued checks. Seems to be alot of conflicting information out there.

quote:
Originally posted by John Burnett:
As with almost EVERY question, one caveat: Check state law. Some states require that banks cash certain types of government checks for non customers under certain conditions.


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#61 - 12/10/00 03:31 PM Re: Cashing of Government Checks
Dana Turner Offline

Platinum Poster
Dana Turner
Joined: Dec 2000
Posts: 543
Pipe Creek TX - U.S.
rfujio:

If you don't already do so, you should consider developing and implementing a thumbprint signature program for all non-customer items -- and for both customers and non-customers for government checks. You should also require -- at least for non-customers -- that the person(s) presenting the government check also must provide his/her Social Security card. Then compare the SSN (not the signature) with the SSN printed on the face of the check. The face should also tell you for what purpose that the check has been issued (e.g., disability, Social Security, ADFC, etc.) and may help you question the presenter.

------------------
Dana Turner
Security Education Systems
danaturner@bankersonline.com
210-310-0212

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Celebrating 42 entertaining years of crime . . .
danaturner@email.com

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#62 - 12/11/00 01:17 PM Re: Cashing of Government Checks
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 39,704
Cape Cod
That's not a bad idea. However, don't forget that many SSA recipients receive benefits on a deceased spouse's account, and the SSN on the check (some still get them) may not agree with the SSN on their SSA card.
_________________________
John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#63 - 12/13/00 09:21 PM Re: Cashing of Government Checks
rfujio Offline
New Poster
Joined: Nov 2000
Posts: 10
Middletown, CT
Thank you Dana and John for your feedback. While I am not the Security Officer for the bank, I have seen these systems at trade shows and I did bring it back for discussion. However, our losses have not warranted to moving to such a system, but its something for us to at least think about. We do, when appropriate, ask for social security cards to back up the SSN listed on the checks. But the fraud stems more from IRS refund checks then anything else. And now since the IRS gives more refunds via ACH, the problem is moving into the Rapid Refunds type checks - which we will not be honoring for non-customers.

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