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Fiery Sword 01-17-2007 04:04 PM

"For Deposit Only" check / Banking Question
 
A guy who I do a bunch of side-work for just handed me a check I've been beating him up for for weeks now. In the "Memo" portion of the check, he wrote "For Deposit Only". Does anyone know what this means?

I've had trouble with this guy bouncing checks on me before and I'm not sure if this is just a stall tactic to prevent me from going and cashing his check - which is what I've been doing with him since I lost my trust in his financial stability. Is he just trying to buy a few days before this check will clear? Will I get rejected if I try to cash it at his bank?

thanks for any insight.

trinitone 01-17-2007 04:11 PM

I'm not sure how it works if the check writer puts it on there like that. If you, the receiver, put that on the check as part of your endorsement, then the check should only be accepted for deposit. Furthermore, if you add your account number to the endorsement, it should only be allowed for deposit into that particular account. Sounds to me like you need to stop taking checks from this individual. :D

Fiery Sword 01-17-2007 04:35 PM

Quote:

Originally Posted by trinitone
I'm not sure how it works if the check writer puts it on there like that. If you, the receiver, put that on the check as part of your endorsement, then the check should only be accepted for deposit. Furthermore, if you add your account number to the endorsement, it should only be allowed for deposit into that particular account. Sounds to me like you need to stop taking checks from this individual. :D

That all makes sense to me, I've just never hear of it being written like a memo or with the person's signature. I'll play dumb at the bank just to see what happens.

And yes, I shouldn't accept checks from him. Problem is, I always end up getting sucked into doing more work for him. I also always end up getting the money from him somehow, but it is always a freaking hastle. Damn small business owners!!!:D

david_42 01-17-2007 07:52 PM

If it is in the memo portion on the front of the check, I doubt any bank would pay attention to it. I've seen several cases where people have put "paid in full" on a short check & the courts say nope, ain't binding.

Cheesefood 01-17-2007 07:55 PM

I've put that phrase on the endorsement portion when I'm depositing into an ATM in a sketchy area. One time I tried to cash a check where I had written it and the cashier refused to allow me to cash it out.

EvilTOJ 01-18-2007 02:15 AM

Just sign the back "Deposit Only" and your problem is solved! :D

homebrewer_99 01-18-2007 02:34 AM

I don't know...I think I would just offer to drive him to his bank to make a cash withdrawal.;)

Hippie 01-18-2007 04:16 AM

Explain to him about the "Vig" and that it grows larger every day...

iBeer 01-18-2007 12:02 PM

The Memo is binding to the person in the payee line. If it says "paid in full", and you cash the cheque, then it technically means that you agree with the fact that it says paid in full. But that's neither here nor there, because it would cost you an arm and a leg in legal fees to resolve.
The bank may very well refuse to cash it because of the memo, but it would depend on the teller.
You're best bet is to deposit the cheque into your account (as long as the name in the payee line is the same as on the account).
The only way the guy would have been buying himself extra time is if the account you would be depositing into is different from his account.

Fiery Sword 01-18-2007 01:15 PM

Just to cap off this story, I went to (his) bank this morning and presented the question to the teller. She was really nice and was kind of intrigued herself. This was probably voilating some kind of protocol but after typing away for a second she said that there is insufficient money in his account to cash the check, but there are two pretty large pending deposits that would cover the check once they cleared. So, having a reasonable confidence that the check would clear I went over to my bank and deposited it like usual.

She added that writing "For Deposit Only" on the check technically does mean they should not cash the check, but if there were sufficient funds and the Payee was correctly identifiable then she would do it.

......Startup architects are worse than teenagers in the mall when it comes to money....


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