It’s common practice to cash a check written in your name. It’s a logical thing to do. But do you know that some people cash checks that don’t have their name? Of course, it’s legal, provided you do it right. If you are looking to cash a check that’s not in your name, here is how to go about it.
You can cash a check that’s not in your name if the owner signs it to you via an endorsement. You can also cash such a check if it has a blank endorsement because this kind of endorsement turns the check into a “bearer instrument” that anyone can cash.
Cashing a check in someone else’s name may not seem possible at first until you get to the end of this post. Below, I have highlighted how to cash a check that’s not in your name easily and legally.
How Can I Cash a Check That Is Not in My Name?
Of course, it’s possible to cash a check that’s not in your name. But the owner will need to sign it over to you through a full endorsement.
You can cash a check that wasn’t initially made to your name if it’s signed over via an endorsement in full or a blank endorsement. However, you cannot cash a check handed over via a restrictive endorsement as such types of checks can only be deposited.
With a blank endorsement, the check doesn’t really need to be signed over specifically to your name as such checks don’t have the payee’s name in the first place. Provided it’s already endorsed this way and signed, individuals who get hold of the check may cash it without the endorser’s help.
How Check Endorsement Works?
To understand how endorsement works, let’s first look at the part of the check where it all happened before we move on to the steps:
- On most checks, you’ll find a space behind the check designated for endorsement. In this space, there will be some blank lines, including an “x” that shows where the individual looking to endorse it must sign their name to pass it over to you.
- The space may also have a part labeled “Endorse here” and “Do not sign/endorse/stamp below this line.” The latter warning is included because banks also use the space behind the check (a little below the endorsement, specifically) for check processing data.
- You don’t want a situation where your endorser signs in the wrong space. If such happens, your bank may decide to decline the check when you eventually want to cash it. But, as we’ll see in a moment, your bank has zero legal obligation to accept endorsed checks.
If you are depositing a tax refund, check if a federal tax refund is taxable so you can plan. Now that we have covered where it all takes place let’s look at the steps involved with the two types of endorsements that allow you to cash a check that’s not in your name.
The Steps for an Endorsement in Full:
As I stated earlier, you must involve the originally designated payee of the check with this kind of endorsement as they need to sign over the check to you before you cash it.
The step is easy, by the way, and it involves the following:
- Verify that your bank accepts a third-party check:
There is no law that requires your bank to accept this kind of check as it has risks. As such, whether you can cash the check at your financial institution after it’s signed over to you depends on your bank’s policy.
Contact your bank, or you can visit one of its branches and find out if a third-party check signed over to you will clear. If the bank accepts such checks, inquire if there are any extra requirements as bank policies differ. For example, some banks will require both you and the individual signing the check over to have/open accounts with the bank.
Other places like 7-Eleven check to cash won’t accept this type of transaction.
- Contact the individual signing over the check and arrange to visit your bank:
If your bank requires the physical presence of both of you, arrange with the person looking to sign the check over to show up. Even if it isn’t clearly required, it’ll boost the chance of the check clearing. Ensure to conduct proper identification, particularly if you didn’t previously have an account with that bank.
- Have the endorser sign the check over to you
As soon as you are sure that your bank accepts third-party checks, you can start worrying about ensuring that the individual endorsing the check does it appropriately. To prevent issues, you’ll want the individual to do the following things:
- Sign the back of the check like they often do, but (and this is crucial) keep their signature in the upper part of the endorsement area. If this part has three lines, you want them signing on the top line. You don’t want them taking excessive space with their signature, either, as they’ll need the entire area to finish the process.
- Write or print “Pay to the Order of,” and then write your name in the second line of the check’s endorsement segment. If they don’t have adequate space, they can replace “Pay to the Oder Of” with “FBO,” a short form for “For the Benefit of.” Of course, you’ll also want to make sure that your name is well spelled.