anyone think of a legal reason why the paying bank should ever review endorsements of drawn checks?

Do you treat your own cashiers checks differently when it comes to endorsement review?

Does endorsement missing mean that there is no endorsement on the back of a check or that the check is missing the payee's endorsement and is there a legal difference between endorsement missing and not endorsed as drawn?

Scenario- understanding ucc 4-208, you have a check for $500,000.00 payable to ABC company and the check is endorsed by xyz Company, do you pay the check? Another example is the check is also large and payable to two parties separated by "and" and it is endorsed by one of the parties, do you pay or return the item for endorsement incomplete? Would the paying bank have any liability for paying these items or would the BOFD carry all the liability?

currently if the endorsement is missing, our bank takes no action, we pay the item however if the endorsement is completely different from the payee or incomplete, we return the item "not endorsed as drawn". Is this practice "old school" and legally not necessary?

funny thing about endorsements and the paying bank is that the maker screams at us if we pay the item with an incorrect endorsement and they yell at us for returning an item with an incorrect endorsement, you really can never win.

any answers on your practices or recommended practices is appreciated.

Regards,
CJ

The BOFD provides endorsement warranties at presentment. Why waste time checking all these endorsements?

Well that would be a question for our compliance dept.<g> I know checking endorsements is silly, but some folks are resistant to change. I don't want to check any endorsements, I am just trying to convince Compliance that it is a waste of time. Maybe I will show them your response.<g>

BTW what do you do when a BOFD has breached a presentment warranty, you prove it with affidavit and the bank still refuses to remit the funds. We could sue but the legal fees would be more than the check. I wish there were an "action line" for bank to bank issues.<g>

thanks for your endorsement.<g>
cj