Ward Cashing Check on Representative Payee Account

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Question:

If we have a representative payee account and the ward on this account comes to the bank with a check made payable to himself, and wants to cash it, what right of offset do we have? If this were to be a bad check, could we charge it back against the account, since the ward is the owner of the account?

Answer:

The individual that you have called the ward doesn't have any contractual relationship with you. The account belongs to the representative payee; he or she is accountable for those funds to their beneficial owner. If the check bounces, you can attempt to collect on the endorsement, but not through an offset against the representative payee account.

First published on BankersOnline.com 5/24/10