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  Home >> Checks/Money Orders >> Checks You Received  
Cashing a Third Party Check

I have a check made out to my friend that he gave me permission to cash, but the bank won't let me cash it. How do I go about cashing it?


You haven't said whether your friend endorsed the check. Without an endorsement, you'll get nowhere.

Even with your friend's endorsement on the check, your bank and others may refuse to cash it. There's no rule requiring them to do so, and banks are becoming ever more reluctant to cash checks payable to third parties for their customers, or for anyone else. That's because the bank can't be sure of the first endorsement - your friend's in this case. If that endorsement turns out to be fraudulent, your bank will be on the hook for the check, and so will you, and that liability exists for up to three years.

You also didn't indicate if you've tried to deposit the check. You may have meant that you did when you asked about cashing it, but to bankers, those are two different procedures. Your bank might be more amenable to taking the check for deposit than to cashing it. If your bank won't take the check, you may only have two options left. One, find a check cashing business that will cash it for you. Don't forget, you're liable on the check if it turns out to be no good, no matter to whom you transfer it. Two, sell it back to your friend, assuming you already gave him the cash.

Published on BankingQuestions.com 5/07/08