Q:

What is a check endorsement?

A:

A check endorsement is a signature on the back of a check. Financial institutions require all parties listed on the check to sign the back to be able to cash or deposit the check. A check typically has a designated area for customers to sign, and it is usually marked with the statement "Do not write, stamp or sign below this line."

The signature on the back of the check should match the name on the front. If the payer of the check spells the name incorrectly, financial institutions advise individuals to sign it the way it's written and then sign it normally. The same is true of any others listed on the check unless other signatures are not necessary.

In addition to the endorsement, individuals should also consider restricting how tellers can process the check. If the check already has a signature on the back of it, anyone with an ID matching that name would be able to cash the check. Using a phrase such as "deposit only" indicates to the bank teller that he or she is not to give cash on that transaction, and it limits the transaction to a deposit only. If someone picks up the check with fraudulent intentions, this will make the person unable to cash the check.

Sources:

  1. about.com

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