How can I cash a third-party check?

December 27, 2005 5:17 PM

How can I cash a third-party check?

My dad has a check made out to him (for several thousand dollars) that he would like to cash. Because of an ongoing dispute over a lien, he doesn't want to risk depositing it into his own account. I assumed that he would be able to endorse it and I could just deposit it into my checking account for him, but apparently, Washington Mutual does not accept third-party checks. Is there a way we can convert his check into cash without depositing it into his own account?

posted by designbot to Work & Money (27 answers total)

A lot of banks are going to have issues with third party checks. Your only choice may be to use a check cashing agency, which will take a fee for doing the service. This may or may not be less than what the lein is against your dad's banking account.
posted by Medieval Maven at 5:25 PM on December 27, 2005

You could try a (ecchh) check-cashing place; they don't really ask questions, but they do take a percentage out. If it's really urgent, and you're willing to lose money, that is.
posted by interrobang at 5:25 PM on December 27, 2005

Baloney. Have him sign it, and deposit it into your account via ATM.
posted by bingo at 5:25 PM on December 27, 2005

Jinx!
posted by interrobang at 5:25 PM on December 27, 2005

Bingo, if it goes into the account via ATM, it will still be looked at by someone, and there is a chance that the funds will be removed from his account before he has a chance to withdraw them, or if he does withdraw them, the bank will place a hold on his account for the amount of the check. This will be particularly true if the paying bank (the bank upon which the check is drawn) looks at the endorsement and says, "No fucking way, asshole" and tells the paying bank (WaMu, in this case) that they want their money back. Banks have different rules about endorsements. Some will take "For Deposit Only to Account 123456" and some require the signature of the payee, and some won't take it with the signature if it's going into an account that is not in the name of the person it's payable to. I would say it's best not to take the route of chance, myself.
posted by Medieval Maven at 5:33 PM on December 27, 2005

Baloney. Have him sign it, and deposit it into your account via ATM.

You know, I have a feeling this would probably work, but I don't think I'd want to risk losing the check. I never endorse my personal checks like you're supposed to, and they always go through fine at the ATM.

You could try a (ecchh) check-cashing place; they don't really ask questions, but they do take a percentage out. If it's really urgent, and you're willing to lose money, that is.

It's not that urgent, and I don't think I'm really willing to lose money, either. Any other options?
posted by designbot at 5:34 PM on December 27, 2005

I think bingo has it. Deposit via ATM. I've done it before without a problem.
posted by lester at 5:36 PM on December 27, 2005

What about taking your dad with you, along with the check, to your bank and having him show ID at the time of endorsement? Maybe you could call your bank first and ask if they'd be okay with that.
posted by Gator at 5:38 PM on December 27, 2005

bingo or lester; have you done it at a Washington Mutual?
posted by designbot at 5:38 PM on December 27, 2005

If time is not a major factor, have him use the check as an initial deposit in a savings or checking account at a different bank. Wait until the check clears, have the bank cut you a cashier's check for the amount, and then have him close the account at the 30-day mark to avoid fees. Shouldn't take more than 5 working days for the check to clear. (assuming USA - don't know about other countries.)
posted by TeamBilly at 5:45 PM on December 27, 2005

My bank told me that post 9/11 regulations were changed to facilitate tracking money and that third party checks are no longer allowed.
posted by StickyCarpet at 5:48 PM on December 27, 2005

designbot, you don't have an email in your profile, or I'd just email you, BUT -- I work in banking. Please, don't do anything sketchy and get your account frozen, ok? Because I can guarantee you, that will be a helluva lot worse than going to a check cashing place. Sure, you've badly endorsed checks that were rightfully payable to you for deposit to your account, but actively and purposefully depositing a check that you know is not kosher under WaMu's Terms and Conditions isn't a good idea. They may be very strict about this kind of thing, and then there you'll be, trying to explain this away. If you sneak a third party check under WaMu's nose, to them you are sneaking in a liability. They don't really know you (probably) and they don't know your dad (apparently). Additionally, when you endorse the check, you are guaranteeing that all other endorsements are valid, and you will be on the hook if that check comes back bad. If the check is returned unpaid, WaMu may freeze and/or close your account. I'm not trying to be all chicken little here, but I am trying to be thorough and honest within my knowledge.

Since you say your dad has a bank account but there is a lein against it, do you know what that bank's policy might be in relation to him just cashing the check at thier counter? Conversely, can he go to the paying bank and cash it there, or is it a bank that he does not have access to? Find out that bank's policy if it is accessible to him, and then see about cashing the check there. So long as he can provide ID, it may work out.

StickyCarpet - to my knowledge there is no specific rule/reg/new law that speaks to third party checks, however, there was/is a lot of work around money laundering. Third party checks could be part of a money laundering scheme, and as such, many banks have probably begun declining them just to rid themselves of an unnecessary risk.
posted by Medieval Maven at 5:56 PM on December 27, 2005

Why not just have him cash it at the bank it's drawn upon? You could then deposit the cash at Washington Mutual pretty easily.
posted by willpie at 6:02 PM on December 27, 2005

Is it feasible to go to a branch of the bank on which the check is drawn? If it's from a bank (and not, say, drawn on a state or federal treasury or on a brokerage account), he shouldn't have any problem cashing it in person through a teller at the originating bank. Some banks have started to charge fees for this but they're usually less than $5. I have cashed many, many checks this way (though none for several thousand dollars), and as long as you have a couple forms of ID you shouldn't have a problem.
posted by IshmaelGraves at 6:03 PM on December 27, 2005

Bingo, if it goes into the account via ATM, it will still be looked at by someone, and there is a chance that the funds will be removed from his account before he has a chance to withdraw them, or if he does withdraw them, the bank will place a hold on his account for the amount of the check.

I think it's likely that the funds will be placed in his account (officially), but with a hold on them. He just has to wait out the hold. Once the check clears via the bank it's drawn on, and WAMU has time to triple-check whatever info pleases them, they'll relax and release the funds.

That's what I think will happen. I have never heard of a bank confiscating a check that they were refusing to cash.

On the other hand, I don't work in banking and Medeival Maven does, so perhaps he would know better.
posted by bingo at 6:09 PM on December 27, 2005

Depending on policy the ATM deposit might have a hold on it, might not. But if the person (people) who actually clean out and process the ATM take a look at that check, and also depending on how strident WaMu is about this, those funds could be frozen and/or removed immediately. If the other bank doesn't like the endorsement and refuses payment on the check, our asker will likewise being on the hook for "thousands of dollars," particularly if they have already been removed by the poster from the account. If, as StickyCarpet's bank told him, they view this as a post-9/11 terrorism issue, then it's possible they will be QUITE serious about it. I do work for a bank, but I don't work for WaMu specifically, so I don't know what their internal policy is. I DO know that you don't want to create hassle for yourself when it's likely just as easy to cash it at the paying bank (best option) or a check cashing service (next best option).
posted by Medieval Maven at 6:17 PM on December 27, 2005

I know, I know, the rule of Ask MeFi is that you address only the question, but I'm sorry. I feel that my role as someone who answers ask mefi questions is to be helpful:

designbot: Has it occurred to you that this money might be best applied toward the lien? You don't specify what it is, so if it's something that may end up taking care of itself, then great, ignore it. However, the more delinquent you go on paying a lien, the worse the creditors and collectors make your life -- not just now, but later on when you've finally got your head near the water again, and are trying to get credit again.

You may have totally evaluated this, and decided that paying toward the lien is a bad idea. If so, then I hope that's the right decision and that everything works out. I just wanted to throw out there that paying some or all of that money toward the lien may actually be the best thing for your father to do. I can't say for sure that it is because I don't know your situation, but I hope you will give it some thought if you haven't considered it already.
posted by twiggy at 7:10 PM on December 27, 2005

I recently advised a friend on a similar situation, Caching the check in person, in a branch of the bank that issued it worked flawlessly. The only, tiny drawback is that the cachier might try really hard to persuade you to open an account with them (the assumption being that you are caching a check because you have nowhere to deposit it to).
posted by blindcarboncopy at 7:23 PM on December 27, 2005

Go to a casino. They'll do it for free and without questions.
posted by jaysus chris at 10:21 PM on December 27, 2005

I know, I know, the rule of Ask MeFi is that you address only the question, but I'm sorry. I feel that my role as someone who answers ask mefi questions is to be helpful

You do not have a "role as someone who answers ask mefi questions." You are someone who drops into an AskMe thread and decides whether you do or do not have an answer to the question the poster is asking. If you decide you can't or don't want to answer the question but do have an idea you think will improve the poster's life, you are in the exact same position as someone who, when you stop to ask directions, starts trying to convert you to their religion because that is, after all, the best way to be helpful. I don't know why that is so hard for people to grasp.
posted by languagehat at 6:15 AM on December 28, 2005

Whoa, don't deposit it through the ATM. My son endorsed his paycheck and put it in my account via the ATM before I endorsed it as well. He then withdrew almost the entire amount, around 300 dollars as cash. It would have been fine had I also endorsed the check, but since I hadn't the check was sent through the US postal service from the depository since according to BofA it wasn't eligible to be deposited in my account.

So, this was the week before Christmas. The check has not made it back to our house yet, my account was debited for the cash he received and we just have to wait until the check shows back up before it can all be straightened out.

Bad bad idea to try to put it in your account.
posted by hollygoheavy at 8:48 AM on December 28, 2005

Has it occurred to you that this money might be best applied toward the lien?

The lien has actually been recently paid off. Some non-licensed contractor claimed that my dad owed him money, and he disputed it, and there was this whole convoluted thing. I don't quite understand how all that works. The basic jist is, the lien is paid off now, so the bank shouldn't take money out of his account, but because they have emptied his account in the past, my dad is wary about depositing so much money so soon.

Is it feasible to go to a branch of the bank on which the check is drawn?

Unfortunately, the bank is in Milwaukee, and we are in California.

Go to a casino. They'll do it for free and without questions.

I'll look into this, or perhaps just a check-cashing store.
posted by designbot at 10:16 AM on December 28, 2005

Actually, I'm having trouble finding an actual store that cashes checks. Am I missing something? All the places that seem like they should (Check Into Cash, Check 'n Go, etc.) look like they actually do payday advances (i.e. you write them a bad personal check, and they wait to deposit it, giving you a loan in the meantime).
posted by designbot at 10:19 AM on December 28, 2005

designbot, did your bank have anything to say about my earlier suggestion, i.e., taking your dad with you and having him show ID at the time of endorsement? No go?
posted by Gator at 10:22 AM on December 28, 2005

No, they just don't take third-party checks, period.
posted by designbot at 10:31 AM on December 28, 2005

I'm beginning to wonder what the point of the endorsement area is. I can deposit a check made out to me, whether it's endorsed or not, and I can't deposit one that isn't, whether it's endorsed or not. It doesn't seem to do anything.
posted by designbot at 10:34 AM on December 28, 2005

designbot, most of the payday loan people also do check cashing. Here in Chicago the Currency Exchange is the main check-cashing place. If you go to one of these places in person they'll cash your check; this can involve having your picture taken (quickly, with a digital camera), having your ID copied, and filling out and signing a short form, though sometimes it's less complicated. Some may require a $3 or $4 "membership fee" in addition to the percentage charged for cashing the check (which, in my experience, can vary widely — no idea what it is in California).

In addition, some banks have arrangements with other banks to cash checks for non-account-holders from these other banks as though they were drawn on the bank where they are being cashed. It's fairly unlikely, but it's worth calling the Milwaukee bank to see if they know of any banks with branches in CA which would do this.
posted by IshmaelGraves at 10:39 AM on December 28, 2005