Accepting Check Payable to Corp and Our Customer

Answered by:

Question:

What risk does our bank take when accepting a large check payable to a non-customer corporation and an individual (our customer) and our customer wants to deposit the check into their personal account? If the check has a signature guarantee from the corporation's bank, is our bank at any type of risk for accepting this check for deposit into our customer's personal account? Should we recommend that the check be deposited into the corporation's bank account and the corporation write a check to the individual?

Answer:

How well do you know your customer and are you really concerned that the corporation didn't sign off its interest in the check? If you know your customer well and you have no reason to doubt his or her integrity, you probably should feel OK about taking the check for deposit. You might make yourself feel better if you give the company a call and verify that it's aware of the transaction and that it has, in fact, signed off. Do you accept some risk in doing so? Sure. If the corporation's endorsement isn't legitimate and authorized, the corporation could have a claim through the party issuing the check. That's why I recommended that you try contacting the corporation for verification.

First published on BankersOnline.com 7/28/08