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Return Check for Reason "Two Signatures Required"

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Question: 
We have accounts that require two signatures. When the customers have gone to places such as Walmart or Sam's Club, the check was scanned and handed back to them and a draft presented. Therefore, the signatures could not be verified. It's not the customers' fault, but we in turn, return the check for the reason "two signatures required" which I don't agree with but what else can we do?
Answer: 

This item has been converted to a "POP" entry under the ACH rules. It's not a check anymore, it's an electronic funds transfer and, as you suggest, the "two signatures required" language in your contract is rendered meaningless. (Note that "business size" checks cannot be converted to POPs.)

I suggest you let your customer know immediately and in writing that allowing their checks to be converted to EFTs voids that portion of your contract; i.e. it renders it impossible to enforce. If you wish, you might suggest that the customer go to the business size checks in order to prevent this happening in the future. (I would not make that suggestion.)

Many banks have discontinued acceptance of "two signatures required" accounts except when required by a court order. You might consider doing so as well.

First published on BankersOnline.com 9/5/11

First published on 09/05/2011

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