Bank of America - Third Party Checks (dispute, checking account, charge)
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This just happened to me with Wells Fargo. I endorsed my check to my fiance', he endorsed as well, and I deposited through the ATM. The next day we called to find out why his account reflected a check deposit then adjustment (withdrawal), and were told that we were not allowed to deposit 3rd party checks through the ATM. There was a lot of confusion. The customer service team could not tell us why we weren't allowed to do this and said the check would be returned through the mail but they didn't know how long it would take. They said we should have both come into the bank with ID to deposit. We never have a problem when I endorse my checks and he deposits through a teller, and I never go into the bank with him. I asked how we would have known about this policy and received no direct response. I don't get it???
Banks are very reluctant to take any signed over checks. It's the way things are now. There has been so much fraud with checks, that banks have taken many losses they just don't want to deal with it.
Now, going into a teller adds a human touch, where they can use discretion, as there are LESS likely reasons the check would get returned, ie: low dollar amount, drawn off the same bank, if you've created a pattern of doing it, etc.
The ATM is a machine and it's programmed that nearly no-matter what it will get sent back as returned. That's just how it is.
Here's the easiest way to explain bank's mind-set of not accepting third party checks:
Let's say your grandma writes you, JUST YOU, a check for $100 for your birthday. Grandma banks at ABC Bank. Grandma signed the bottom of the check saying that for the amount of $100, she agrees to have ABC Bank pay you (Jane Doe) the sum of $100 by routing the funds out of her account drawn off of ABC Bank.
You get the check in the mail, you're all happy and want it deposited, but you realize you owe a friend $100. So you decide to cut out the middle man- You turn the check over and write "Pay to the order of Bob Jones, and you sign and Bob signs and off he goes to his bank, Bank of America to deposit it.
So, off Bob goes, deposits it into his account. Probably puts up a fuss, because Bob is a prick and doesn't understand banking, so the teller just puts it into his account, probably after explaining that there runs a risk of it being returned.
So, it's deposited into Bobs acct, and like normal, the funds become available the next day (Mind you, Bank of America hasn't gotten the $100 from Grandma's ABC Bank yet, they literally front you the money until they "collect"). So, off Bank of America goes. They use the routing # to get the bank, and go to Grandma's account to get the $100. But ABC Bank notices something. They notice that their client, Grandma, agreed to pay Jane Doe $100 and therefore it should go into Jane Doe's account, not Bob the prick that Banks at Bank of America. So they say, "No way Bank of America, we're not giving you the $100, the $100 youve already given to Bob"
So Bank of America is pissed and turns around and goes to Bob's account and "returns" the check (Taking the $100 out) this is called an adjustment, and banks usually charge a $12 fee for the hassel.
That's why there are "holds" placed on checks sometimes. It can take up to 10 days before the bank actually gets the money in their possession, thus "holding" the check (not allowing you to use it) until they know they've received the money for sure (usually only on large checks)..
People have a very hard time understanding this, but it's how it goes now. Checks are very ancient and a very risky operation. Banks hate them. They cause so much fraud and loss.
Banks go in assuming the worst, it's the only way to protect themselves. Just like we assume the worst and wear seat belts and have home security systems and have passwords on our phones.
Imagine how easy it is to do check fraud. I go to your mailbox, steal the check from granny that's written out to you, write "pay to the order of ___ (me) on the back, forge your signature and bring it to my bank. I deposit it and the next day i go in, take it out, close the account and by the time granny's ABC bank doesn't pay it, and Bank of America wants to return it, the account is closed. WHos' on the hook for the $100? Bank of America.
THAT'S WHY banks HATE 3rd party checks.It happens ALL THE TIME, and usually not just for $100. It's usually for a lot higher of amounts.
The ATM is a machine and it's programmed that nearly no-matter what it will get sent back as returned. That's just how it is.
The ATM is not completely autonomous. It has to be reconciled just like a teller's cash drawer, either by the institution, or an outside contractor. The thing is, with the increase in ATM functionality, fraud has become much more expedient. As you mentioned, the elements of human discretion and detection are eliminated, so the bank is more likely to return checks for several reasons, like missing dates, endorsements, or unrepresented payees. And this isn't because banks don't value your business. Quite the opposite. It is to protect the customer and their funds. Sadly, the customer who refuses to show ID & asks for waivers/favors because they have a high balance, is the same customer who gives the bank grief for failing to catch fraudulent teller/ATM activity. This was sort of the sentiment that I attempted to express with my last comment.
Quote:
Originally Posted by knke0204
So, it's deposited into Bobs acct, and like normal, the funds become available the next day (Mind you, Bank of America hasn't gotten the $100 from Grandma's ABC Bank yet, they literally front you the money until they "collect"). So, off Bank of America goes. They use the routing # to get the bank, and go to Grandma's account to get the $100. But ABC Bank notices something. They notice that their client, Grandma, agreed to pay Jane Doe $100 and therefore it should go into Jane Doe's account, not Bob the prick that Banks at Bank of America. So they say, "No way Bank of America, we're not giving you the $100, the $100 youve already given to Bob"
Right on the money. I have many customers affected by this, and try to reason with me that the funds were available in their account, so they shouldn't be held responsible. The fact is that banks FRONT you the money. Next-day availability is a courtesy that we all take for granted. Fraud teams have to work retroactively, for YOUR convenience.
I tried to cash one for my husband with my husband present with his ID in hand and they would not allow it at US bank.
I'm sorry but it's completely ridiculous.
When I arrived in the USA nearly 10 years ago I was quite surprised that banks here would accept 3rd party checks (it's unknown in Australia, cheques must be deposited to the payee's account, or can only be cashed at the payor's actual bank), but I have noticed over the last couple of years that the major banks (like USBank and BoA) are no longer accepting them.
It's about time as well, I'm sure it cuts down on a whole lot of fraud.
I also thought third party checks were no longer accepted. Decades ago, they were quite common but are they still legal today? Even if they are, do banks generally accept them?
The ATM is not completely autonomous. It has to be reconciled just like a teller's cash drawer, either by the institution, or an outside contractor. The thing is, with the increase in ATM functionality, fraud has become much more expedient. As you mentioned, the elements of human discretion and detection are eliminated, so the bank is more likely to return checks for several reasons, like missing dates, endorsements, or unrepresented payees. And this isn't because banks don't value your business. Quite the opposite. It is to protect the customer and their funds. Sadly, the customer who refuses to show ID & asks for waivers/favors because they have a high balance, is the same customer who gives the bank grief for failing to catch fraudulent teller/ATM activity. This was sort of the sentiment that I attempted to express with my last comment.
I know that, technically you are right about why checks will be returned but I fear it doesn't work that way. Not with big banks and bulk bundling of checks. I once wrote a rent check and very absent-mindedly failed to fill in the payee's name. (I know. Not a word, please!) The office manager put that check right in with all the other rent checks, made his deposit slip with its total and took them to the bank where the teller used the deposit slip to credit his account.
I later asked a banker how that could happen. Answer: because everything is done by machine. The machine reads the amount and records it. That's it. Later another banker told me that "they" (whoever they are) are supposed to look at each check and verify the deposit slip but, she said (shrugging), they often don't.
A friend says the same thing happened to her when she once failed to sign her check to someone. When humans did all that work, neither of the above checks would ever have been accepted. But, all that machine reads is the amount and your account number for debiting purposes. So I've been told by bankers. Since this does happen, it makes sense. The machine age has its faults just like the human worker age had.
I also have a tird party check I need to cash. Also am wit BOA.Does anyone know if I went into a random bank ,they would cash it?
No. Going to "a random bank" will not work. Banks will not cash a check for a non-client if it is not drawn on one of their accounts - and they sure as heck will not accept a third party check.
Third party checks present several major issues.
1, the biggest piece as to why banks have issues with third party checks it hat it involves the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001. Financial institutions must have, in place, a proper level of procedures to identify the owners of bank accounts that route funds through the account. A bank has no way of properly identifying Joe Schmoe's third party check payable to John Smith, and the person making the deposit could very well be attempting to funnel funds to/for terrorist activities.
2, continuing on with the lack of being able to identify the original payee of the check - there is a huge possibility for fraud and fraudulent signatures. The bank has no way of knowing if that person actually did indeed sign that check over.
Back in college when I was an Assistant Branch Manager for a major commercial bank, I never understood people who thought this was acceptable - they'd get all pissy when I said no to bending the rule over it, but too bad - I'm not risking my job over their problems. Now, as a VP of Operations for said bank, this is a key issue that I'd have no issue discipling employees over if they broke these rules.
No. Going to "a random bank" will not work. Banks will not cash a check for a non-client if it is not drawn on one of their accounts - and they sure as heck will not accept a third party check.
Third party checks present several major issues.
1, the biggest piece as to why banks have issues with third party checks it hat it involves the International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001. Financial institutions must have, in place, a proper level of procedures to identify the owners of bank accounts that route funds through the account. A bank has no way of properly identifying Joe Schmoe's third party check payable to John Smith, and the person making the deposit could very well be attempting to funnel funds to/for terrorist activities.
2, continuing on with the lack of being able to identify the original payee of the check - there is a huge possibility for fraud and fraudulent signatures. The bank has no way of knowing if that person actually did indeed sign that check over.
Back in college when I was an Assistant Branch Manager for a major commercial bank, I never understood people who thought this was acceptable - they'd get all pissy when I said no to bending the rule over it, but too bad - I'm not risking my job over their problems. Now, as a VP of Operations for said bank, this is a key issue that I'd have no issue discipling employees over if they broke these rules.
Interesting. I didn't know it was now a law. I worked in banking years before that and the only way we did it, was if it was a really really good customer with a whole lot of money and it was a small check. The only one we never questioned was a guy who owned a sports bar. He would take checks from his customers who HE knew well, and cash them so they could continue drinking.... and then bring them to us. They were rarely near 100 bucks, and he had his business account with 100K in it, and his personal accounts with another 100K or so, and his home loans and business loans and car loans.... he wasn't going anywhere.
They bounced back about 1/2 the time, he took the check back, never made a fuss and I'm betting most of his customers made them good.
But the others? Nope no way no how. Not gonna happen.
If a third way party check is returned and mailed out, who will they mail it back to? The person who name and address is on the check? Or the person whose account it was deposited in?
If a third way party check is returned and mailed out, who will they mail it back to? The person who name and address is on the check? Or the person whose account it was deposited in?
If you deposited or cashed the third party check and it is returned, you will be debited the amount of the check and the fees and the check will be returned to you. It's up to you to go back to whoever and get the money back from them.
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