Banks and Deposit Policies

[kenshirley]

I deposited a check that was sent to my son-in-law by his Father as a loan to help them file their BK and to pay the attorney.
They are in the process of changing banks prior to filing as they have loans at the one they are at
So they endorsed the check to me making it a 3rd party check and I deposited it into my account at the ATM for them.
Now I am a little older and I have done this many times in my life without a problem.
This morning, I looked online and there is a .pdf notice they are mailing me stating that they are returning it to me as the payee is not listed as a depositor.
It turns out that my bank, B of A now, will no longer take any 3rd party checks of any kind.
Strange, they don't have to credit them until they clear. I don't understand why at all and of course neither does their Customer Service.
Does anyone know why?

[justbroke]

It may be that you deposited it into an ATM machine. I have noticed that many Banks, especially BofA, have a different policy on deposits made at an ATM machine versus at a teller. I know of some Credit Unions (CUs) that require the Payee to be present when the person to whom it was endorsed, attempts to deposit it into the CU.

Also, if the amount if significant, they may be less likely to accept the check without the Payee present anyhow. You may want to have the Payer (person who wrote the check) stop payment on it. Then have the check reissued to you.

Banks use to be very friendly when it came to 3rd party checks (even un-endorsed ones!) but they are very skeptical now. Just too much fraud out there. Of course, when I had $80K in my checking account at BofA, they never questioned any of the 3rd party checks I deposited! (Including some made out to my creditors!)

[kenshirley]

Beats me. I have had a few 3rd party checks I deposited over my many years with several banks.
I have been told that they would not credit my account until the check cleared and that was fine with me.
I cannot understand why they would not take it at all. The letter I can see online they referred to states that the Payee does not appear on the account.
When I called the bank they said it was because of the 3rd party.
Apparently, according to the letter they are sending, if the name of the payee is not on the account they are not going to accept it now. Maybe that makes it a 3rd party by definition to them.
I still cannot understand why a bank would not take it with conditional deposit when the check cleared.
Big changes for banking I guess.

[kenshirley]

By the way, this is the key line that was in the notice they are mailing to me with the check I deposited.
I did call them to explain it and they simply said no 3rd party checks anymore.

"In reviewing your deposit, we found an item where one or more payee(s)
are not listed on your deposit account."

Certainly something I had never experienced before.

[BigJohn]

It might be a new ruling from Homeland Security. What they might be trying to do is trying to make it harder for people operating under the radar (terrorist, illegals, etc.).

[kenshirley]

I don't think so, but if it is it's not working. I can drive to a well known location here in town almost all day long on a main street and find them looking for work.
If you go early enough there are 40-60 of them on any one day.

[AngelinaCatHub]

I found this out the hard way as well. I even went to the bank the check was drawn on. It was my wife's check endorsed to me. I had no account there nor the wife. In fact, some banks CHARGE you to cash a check even if the maker is in that bank, unless you have an account. A way to "encourage" you to get an account. NOT!

In the very old days, many of my customers paid their vendors with checks they got while working their own business. It was common practice. The person would keep the cash and pass the check handling along. Not anymore.

Also, banks USED to run a deposit before a check. Not anymore. They will hit the biggest check first, allowing all the small ones to bounce and 30 bucks a hit, then credit the deposit against the NSF fees. Then they wonder why people get bitter and bk when their used to be free CC goes up in interest and down in credit. I just "shake my head" sometimes and feel justified in staying a cash only person. 'Hub

[kenshirley]

I don't know their reasons, that's for sure.
Anyway, they are mailing the check back to me and I assume they will just put it into their new account which should be up and running by now.