I have a check written to John Smith and Jane Doe, but only John is a customer at the bank. Can we accept the check and deposit it into John’s account?
Yes, you can, BUT there is some potential risk here. To take the check, you would have to be sure that it was properly indorsed by both John and Jane. The problem here is that Jane is not your customer, so you would have some extra due diligence in making sure that she indorsed it over to John and allowed John to deposit the check at your bank. The risk here is that if the check is not properly indorsed – if Jane’s signature was forged – then the bank could be liable to the paying bank or the real Jane. Before taking this type of check, be sure to review your bank policies on taking third party or non-customer checks.
Remember the paying bank has 24 hrs. to return the check once it is received for payment. Also, forged indorsement claims can be made by the customer from the paying bank up to 30 days after the statement cycle.
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