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Home >> Checks/Money Orders >> Checks You Received
Joint Payees Present to Cash Check?
I sold my car to a family member who lives two counties away. He gave me a cashier's check made out to himself and me. He signed the back and I also signed the back. I attempted to deposit this check into my account, and was told by the bank employee that I could not deposit it unless the family member was present. I eventually resolved the problem by getting a supervisor involved, who took the check, but placed a hold on it for seven days. I told the supervisor that I had no problem with this and that the hold was expected. The supervisor said that even placing a hold on it, it was still not the bank's policy to take checks for deposit without both parties being there. This would have caused a great inconvenience due to distance and there being no branches of my bank between where I was and the other county. Is this common practice for banks to refuse deposit (even with hold) for cashier's checks made out to two parties even though both parties signed the back of the check?
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 Many banks have adopted that or similar policies. The reason is that the bank, in accepting such a check for deposit or cashing it, adds its endorsement to the check, and warrants the authenticity and authority of each of the earlier endorsements. That puts the bank in the position of vouching for the endorsement of a party that it has no opportunity to identify or verify. If that endorsement is forged, the bank would be liable for the check.
The hold that the bank placed on the check in your case would not have helped the bank if that second endorsement had been fraudulent, since claims for forged endorsements can be made as long as three years later, and this can vary from state to state. In your case, it would have made matters a lot simpler if the cashier's check had listed only you as the payee.
Published on BankingQuestions.com 2/10/09
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