|
 |
Home >> Checks/Money Orders >> Checks You Received
Nephew Cashes Check for Acquaintance
My nephew was asked by an acquaintance to cash a check he received for Christmas because he didn't have a bank account. My nephew, not realizing his responsibility in doing so, cashed a third party check at his branch. Four months later, the amount of the check, $1,064, was charged against his account because the check was stolen and forged by the acquaintance. Can you tell if there are any regulations that would prevent a teller from cashing a third party check when the person cashing the check did not have the funds in his account to cover the amount? The banking institution is denying any wrongdoing and I feel they are partially at fault for cashing a third party check rather than requiring that the check be deposited. If you cannot provide the answer to this question, can you tell me where I can go to find out how this type of situation is addressed by the Federal Reserve guidelines?
|
|
 When your nephew endorsed the check, he gave a warranty that all signatures on the check were authentic and authorized. That warranty, when it applied to the forged endorsement on the check, was valid for up to three years. Whether he cashed the check or deposited it to his account and withdrew the funds would not have changed his liability to the bank at all.
There are no regulations that prevent a bank from cashing a third party check, whether their depositor has added an accommodation endorsement or not. Your nephew's endorsement simply gave them someone close at hand from whom to collect when the forged endorsement claim landed in their lap. If your nephew has any way to identify the acquaintance who took advantage of his trust, he should contact the police.
Published on BankingQuestions.com 5/17/07
|
| |
|
Accounts
Article
Q&A
Podcast
Video
Blog
Discussions
PDF
Powerpoint
