Help- ATM Deposit

Need guidance. If a check is deposited into the ATM and it is made payable to cash with no endorsement,should we take the liberty of placing for deposit only on the back of the check and allowing it to credit the account?

I am thinking not. With the lack of endorsement, the transfer of ownership of the instrument has not taken place for us to be able to credit it.

I am inclined to send it back to the depositor to have them endorse it and redeposit.

Please advise

Bump

Adding an endorsement where none exists wouldn't be proper. And whether you add an endorsement or not, once you process the deposit and forward the item for payment, you're providing a transfer warranty for the deposit anyway.

That said, if your policy is to not accept unendorsed ATM deposits, then you woudl certainly be within your rights to reverse the credit to the customer and require their endorsement.

Is the depositor your customer, or another bank's customer?

Depositor is our customer. Please explain how the transfer warranty works, if you don't mind.

In layman's terms, you, as the depostory bank, warrant that the person who transfered this check to you (your customer) was the proper person to do so (among other things, but this is the portion that is relevant to this discussion), and that you have no knowledge of any facts to the contrary. You're making this warranty whether the prior endorsement is present on the check.

Since a check payable to "cash" is a bearer instrument (it can be negotiated by anyone), it doesn't need to be endorsed by a specific person, like a check with a specific payee does. But the endorsement still has value as it relates to memorializing the transfer from your customer to you. I'd suggest following through with your orioginal inclination and requiring the customer to endorse the check prior to acceptin gthe item for deposit.

Thank you