I own a body shop and frequently accept insurance checks made payable to the owner of the vehicle only. For years I have been accepting these types of checks and simply stamping my deposit endorsement below their signature and depositing the check. Now I am with a new bank and they are telling me they only accept checks made payable to me. Is this right? I always understood that if the check gets returned by the maker that it bounces back to the last endorser, so why would my bank tell me they can't take the check?
Your bank is unable to verify the endorsements of the payees on these checks. Recently, banks have been burned by forged endorsement claims, which can be made as late as three years from when the check is deposited. Sometimes, the account into which these checks are deposited have been closed by the time the checks come back. As a consequence, banks have become stricter about accepting checks with third party endorsements.
Sometimes a bank will make exceptions to such policies for long-time customers with whom they have never had problems. You should ask your banker if it allows such exceptions.
The alternative is to consider asking your clients to deposit their insurance payments to their own accounts and provide you with a check payable to you. If you are wary of accepting personal checks, you could require that your customers pay you with cashier's checks or money orders. Another option is to inquire of other banks in your area to see if there is one that will accept third-party checks for deposit.
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Your bank is unable to verify the endorsements of the 