Answer:
The risks involved in the deposit of a double endorsed check are the same whether the check was issued by the Treasury Department or by someone's grandmother -- even if you know and trust the endorsement of your bank's depositor (the second endorser), you generally can't verify the authenticity of the first endorsement. If the first endorsement is a forgery or unauthorized, you as the depositary bank will be liable on your warranty that each of the prior endorsements was genuine and authorized, and that warranty extends for between one year (Florida, Georgia and perhaps other states) and three years under the Uniform Commercial Code.
Actually, when a Treasury check is involved, a reclamation claim can be made by the government up to 18 months after the check is first deposited, which shortens the window of exposure in most states.
The depositor of the check is also liable for the amount of the check under these circumstances, based on the bank's right of chargeback.
First published on BankersOnline.com 1/16/12
print
share