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Cashing a Check for a Friend

I have a friend that wants me to pay her the cash for a check she got from a person, so she doesn't have to run it through her account. It is made out to her. Is it okay for her to sign it on the back, then I can deposit it in my account. I will also have to sign it with my account number on back. She just wants the cash.

Don't cash the check for her unless you know a couple of things first. First, if you cash the check and deposit it to your bank account, you will be making yourself liable to your bank if there is anything that causes the check to bounce. How much do you know of the person who gave your friend the check? Are you comfortable that the check is good, or are you trusting that your friend would reimburse you if you are stuck with a bad check?

Perhaps more importantly, you might find that your bank won't be happy about accepting the check for deposit to your account. Banks generally are getting much more careful about accepting what they call "third party" endorsements -- endorsements of persons they don't know (like your friend). That's because a forged endorsement can result in a claim as long as three years after the check is deposited. If you are of a mind to accommodate your friend in spite of the bad check risk, you definitely should ask your bank about its policy on third party check deposits before giving your friend the cash. A few years ago, what you have asked would probably not have caused anyone a second thought, but as check fraud has become more prevalent, bank policies have grown more tightly drawn.

Published on 4/04/07