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About Endorsing Checks

Just for the record, folks, do NOT sign the back of a check made out to you without either a) writing above your signature, “pay to the order of” and the name of a person you want the money to go to; or, b) writing above your signature, “for deposit only”. When you just sign your name on the back of a check written to you, you create “bearer paper”. Such a check, legally, is now the property of the person who “bears” the check. If the check is stolen, well, you get the picture.

This used to be a government of checks and balances. Now it’s all checks and no balances. – Gracie Allen

When you “endorse” a check to a particular person, it is a legal act. It is as if you have just written a new check yourself, with the new person as the person to be paid. The person you specified in your endorsement with “pay to the order of” is now entitled to the money in the account the check represents.

So, will a bank honor a check that is endorsed as “pay to the order of [new person]”? Iffy. The endorsement is legal, but banks have their own, internal policies regarding endorsed checks, regardless of whether the endorsement is legal or not. Check with the bank in question (usually the bank the new person wants to deposit the check into) about its policies before endorsing the check to the new person.

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