Cashing a third-party check
Cashing a third-party check is always a tricky situation for financial institutions. Because a third-party check is double-endorsed, or written to one person, but cashed or deposited into the account of another person, banks have to be certain that the third-party signature is correct and the check is not fraudulent. Generally, if a person is believed to be a good customer, with an account in good standing, such a transaction is allowed. When cashing a third-party check, follow the necessary requirements and be sure the third party is in fact the person the check belongs to.
Instructions
1. Have the third party endorse the check by signing his signature on the reverse side of the check. Instruct him not to write below the signature line or outside the box marked endorse here.
2. Sign below the third party's signature to deposit the check into your bank account. If the account is new, visit a branch office with the third party and sign the check in view of the teller. A hold may be placed on the check until the funds are drawn against the issuing bank account. Hold times vary by bank; however, if the account holder's account (e.g. the account holder is not the third-party member) is in good standing, a portion of the funds will be immediately available. This amount will depend on bank policy.
3. Return to the bank that issued the check. For example, if the check is drawn against a Bank of America checking account, visit a local Bank of America branch. Provide a valid ID, such as a passport or driver's license, and endorse the check.
4. If receiving a check from an unknown third party, endorse the check and deposit into your checking account. Generally, a minimum amount of $50 to $100 of the total check amount will be made available until the funds can be drawn against the issuing bank account. Depending on the amount of the check and the age of the account, a hold can last anywhere from seven to 30 days on average.
Tips Warnings
Only agree to deposit a third-party check for known friends or relatives.
Never cash a check you know to be fraudulent.
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