Requirements for Endorsement
Avoid losses by obtaining documentation to verify the identity of persons presenting checks for cashing, verify the check (valid instrument, maker, balance inquiry), then examine the endorsement.
Payee must be the 1st endorser of a check – Always
The payee’s name must appear on the back of the check in his own handwriting before the check can be cashed. If his name was misspelled on the face of the check, he should sign as written and then sign accurately based upon his identification document(s). If a nickname was used on the “payable” line, you may require the presenter to sign exactly as written and then to sign as indicated on identification documents.
If the check was made payable to “cash”, “bearer” or left blank, you will still ask the presenter to sign his name on the back. The signature will help provide a record of who cashed the check and received the cash. Remember – anyone may cash a check payable to cash assuming that the Maker signature is not fraudulent.
Last endorsement should be written in your presence – Always
A thief could potentially steal a check, endorse it outside of your presence by carefully forging the payee’s signature and present it for cashing with a false identification document. Requiring the person to endorse in your presence could enable you to identify a problem and prevent a loss, e.g. the con-artist’s second endorsement differs greatly from the first endorsement.
Stamped or typed endorsements are NOT acceptable- Never
You are not a bank accepting items for deposit; your recourse may be more limited and is certainly more difficult than a bank has. And, with limited exceptions, you shouldn’t be cashing business checks. No check should be cashed without first obtaining a handwritten endorsement in your immediate presence.