A third party check is a personal or business check that is handed over as payment to someone else. Not all financial institutions accept third party checks; However, knowing the best practices of third-party checks can help you increase your chances of using this form of payment. Follow these steps to be able to submit a check.
Step
Part 1 of 4: Acceptance of Third Party Checks
Step 1. Make sure that an authorized person, i.e. a third party can receive a signed check
Ask if the person has used a third-party check at their bank before. There is no law that requires banks to accept third party checks
Step 2. Contact their bank to confirm if they can accept third party checks
If you are unable to contact the person but know the branch of the bank, you can call the bank's customer service number to inquire about this.
Step 3. Ask if there are any special procedures required by the bank to accept third party checks
In some cases, banks have enacted their own regulations governing this procedure. Some banks require that both parties have accounts with the bank, to ensure funds can be transferred.
Part 2 of 4: Check Signing
Step 1. Flip the check
Look for the 3 lines above the check where you will sign the check.
Banks usually require that the verification be approved by the depositor of funds before being deposited into the bank
Step 2. Sign on the top row of the area
Keep your signature on the first line, so there will be room to turn in the check.
Part 3 of 4: Special Endorsement
Step 1. Write "Pay to the Order of" or "FBO" (For the Benefit of) on the second line
Adjust these words on the left side, leaving room for the name on the line.
Step 2. Write the name of the beneficiary next to "FBO" or "Pay to the Order of"
Make sure the name is written as clearly as possible.
Step 3. Give the check to the beneficiary, the person you are handing the check to
Part 4 of 4: Third Party Signatures
Step 1. Instruct the power of attorney to sign the check on the remaining endorsement line
This may not be necessary unless they have never received a third party check before.
