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How Checks Work
Old 10-09-2009, 02:45 PM   #1
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How Checks Work

Recently I got a check for some gigs for $500 made out to the name of my band. The venue manager said "Oh, you can just cross that out, and write in your name." I did that, and the bank cashed it without batting an eye.

So, what gives with that? I thought the whole idea with checks was that they weren't just like cash -- that they could only be redeemed by the entity to whom they were issued.
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Old 10-09-2009, 02:48 PM   #2
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When I do that, cross out something and write in my name , I add my initials to the change, banks like that, I think.

T-Al your second paragraph is probably true.
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Old 10-09-2009, 03:27 PM   #3
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T-Al, the truth is few human beans in the financial system even glance at a check to verify payee, signature, etc. The paper is processed electronically at the point of deposit/cashing. So, unless you presented it to a bank teller in person, and he/she was over the age of 50 (what are the odds), your check could have been made out payable to Al Capone and signed by Elliot Ness and you could have still made the revision without a hitch - until it hit old Elliot's bank account and then, oops!
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Old 10-09-2009, 03:47 PM   #4
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Maybe it is outside the norm, but my bank -- actually a credit union -- does check (pun intended) the payee. Once I tried to deposit a check made out to ME and DW with only my endorsement. The teller handed it back to me and told me it needs DW's endorsement, also.
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Old 10-09-2009, 04:40 PM   #5
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OK, and here's another weird thing about checks that I have noticed recently.

My grocery store was bought out, and while my gray/white hair was sufficient identification for the old grocery chain, the new chain requires an ID for my checks. Not only that, the clerk has to stop and summon a manager, who saunters over very slowly, looks at my check, ID, and me for a few minutes, and finally, reluctantly, initials her approval on the check. The manager doesn't know me, and the clerk doesn't know me, so it is a case of the blind initialing for the blind, so to speak.

But at the same grocery store, if I slide my debit Mastercard through the machine the process is easier. No ID, no supervisor, just sign and go. She doesn't even glance at it, or at me. I could be any crook and they would never know. Same is true for those with credit cards.

I realize that people pass bad checks, but is it that much easier to forge a check than to make or steal a credit card?
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Old 10-09-2009, 04:50 PM   #6
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The check is now processed on some huge machine which reads the MICR (I think I got that right) and your written amount.... if it can recognize the amount, it is processed without any human intervention...

If the amount is not 'clear', then the check pops up on a screen so a person can type in the amount... that person is NOT looking to make sure your signature is correct, nor that the check was actually made out to you...

When it hits the person's account, they can see if there was something 'funny' going on... but the example you gave... if you cheated and did not pay the band... the person who wrote the check might never know.. they would think that the money went to the correct person.



NOW, let's go way way back (and I think there are some who are old enough to remember this)... you used to be able to sign on the back...

Make payable to "John Doe"... and sign your name... then the check was now John Doe... and John Doe could under that say Pay to the order of "Jill Smite"... now it was Jill Smith's money... and so on... my law professor said he knew of checks where they would tape some paper on and keep this going for 15 to 20 people... until finally someone would deposit the check... now, if the check bounced... they would go backward on the list to get their money... John would pay Jill, Jill would pay X and so on... but John would be out the money unless he could get the check writer to pay him... back then, it was all about trusting the check writer..
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Old 10-09-2009, 04:50 PM   #7
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Originally Posted by Want2retire View Post
OK, and here's another weird thing about checks that I have noticed recently.

My grocery store was bought out, and while my gray/white hair was sufficient identification for the old grocery chain, the new chain requires an ID for my checks. Not only that, the clerk has to stop and summon a manager, who saunters over very slowly, looks at my check, ID, and me for a few minutes, and finally, reluctantly, initials her approval on the check. The manager doesn't know me, and the clerk doesn't know me, so it is a case of the blind initialing for the blind, so to speak.

But at the same grocery store, if I slide my debit Mastercard through the machine the process is easier. No ID, no supervisor, just sign and go. She doesn't even glance at it, or at me. I could be any crook and they would never know. Same is true for those with credit cards.

I realize that people pass bad checks, but is it that much easier to forge a check than to make or steal a credit card?
I always assumed that's because they just don't wanna handle checks and if a check bounces the store is debited, but I think the CC or DB goes through (even thought they are technically required to verify the signature, usually). CC and DC charges under $25 don't even require a signature...swipe and go without even handing over your card. The attitude towards personal checks reminds me of when I used to go around with traveler's checks.
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Old 10-09-2009, 05:29 PM   #8
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I trust checks about as much as credit cards

Whenever I go to the County bldg to pay my real estate taxes the lady at the counter tells me to leave the "pay to" part of the check blank - she says she has a stamp to fill it in. I dont listen to her and make it out to the county anyway.
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Old 10-09-2009, 06:03 PM   #9
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....the clerk has to stop and summon a manager, who saunters over very slowly, looks at my check, ID, and me for a few minutes, and finally, reluctantly, initials her approval on the check. ...
I once had a young honey in a grocery store tell me I was writing the cents amount wrong on the written line. She told me the slash I always used under the cents was wrong. On check no. 7000 something. She just wanted to let me know.
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Old 10-09-2009, 06:13 PM   #10
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I have had grocery store clerks tell me to just sign the check, then they would print the whole thing for me. RED FLAGS. I always tell them I never sign blank checks, and that they were free to print it before I signed it. That always got a nasty smirk. Point is that even if these were honest people, ya never know when you'll run into a dishonest one and have your checking acct cleaned out before you get home with the groceries.

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Old 10-09-2009, 06:32 PM   #11
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Originally Posted by Texas Proud View Post

NOW, let's go way way back (and I think there are some who are old enough to remember this)... you used to be able to sign on the back...

Make payable to "John Doe"... and sign your name... then the check was now John Doe... and John Doe could under that say Pay to the order of "Jill Smite"...
I can remember doing that and receiving endorsed checks like that. I assume you can still do it. I still wrote "for deposit only" before I endorse a check. But I guess the machines don't see that or my signature.

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I once had a young honey in a grocery store tell me I was writing the cents amount wrong on the written line. She told me the slash I always used under the cents was wrong. On check no. 7000 something. She just wanted to let me know.
I use a slash under the cents with 100 under that (e.g x hundred dollars and no/100) Isn't that correct?
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Old 10-09-2009, 08:43 PM   #12
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I can remember doing that and receiving endorsed checks like that. I assume you can still do it. I still wrote "for deposit only" before I endorse a check. ...
Here in Oregon the last couple years the chant has been that the banks do not and will not accept a two-party check. If Mommy writes a check to junior for his rent and junior tries to sign it over to me the banks won't take it.
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Old 10-09-2009, 09:00 PM   #13
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Aren't paper checks scanned and submitted electronically for payment these days, anyway? I'm not sure where this occurs (i.e at the merchant or the merchant's bank). I authorized several thousand dollars worth of ACH transactions for tuition and property taxes last week. I went online and gave them my routing and account numbers. I am comfortable to do this for the tuition payments, but I was hesitant providing the info to the county. Thier online payment process is brand new, I am not overly impressed with the competancy of the county tax dept employees, and I worry that in the case of a dispute, they could easily draft my account....but then I realized the info is printed on the checks anyway so they could still raid my account.
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Old 10-10-2009, 09:05 AM   #14
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The checks are all processed electronically now and the only time the payee or signature lines matter is when somebody howls about it. So yes, you can make your check payable to "M. Mouse" and sign it "D. Duck" and unless Mr. Mouse complains that he didn't get his money or Mr. Duck complains that somebody stole funds from his account no one will care.

Third-party checks are still legal. Those are the ones endorsed Pay To The Order Of.... and then the payee's signature. However because of the hassle of chasing the chain of payees backward if the check bounces few banks will take them anymore.
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Old 10-10-2009, 09:16 AM   #15
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The checks are all processed electronically now and the only time the payee or signature lines matter is when somebody howls about it. So yes, you can make your check payable to "M. Mouse" and sign it "D. Duck" and unless Mr. Mouse complains that he didn't get his money or Mr. Duck complains that somebody stole funds from his account no one will care.

Third-party checks are still legal. Those are the ones endorsed Pay To The Order Of.... and then the payee's signature. However because of the hassle of chasing the chain of payees backward if the check bounces few banks will take them anymore.
Since you are answering questions from above... this applies to them..

First part is true... I saw that at the bank I worked... big machine.. many checks... no person viewing... but the machine scanned it so there was a record of what the check looked like... (that is what you see when you go online and 'look' at a check)...

The last is true also... but to a point... now you are supposed to keep all writing inside that small part on the top (IIRC) 1/4 to 1/3rd of the check... that big expanse below that line if for the banks to print their stuff. Before, you could endorse the check all the way down and even add more paper...

As for scanning... my small company has a check scanner... when we get a check in the mail... we go to the scanner, scan the checks and put them in a file... the check is 'deposited' and that is that... we destroy the check in a month or so if nobody tells us something bad happened... but from what I understand... once you scan the check, you can destroy it right then...
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Old 10-10-2009, 08:44 PM   #16
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What's a check?
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Old 10-10-2009, 09:01 PM   #17
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What's a check?

They are pieces of paper you send to people for special events !
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