What is an Endorser?
An endorser is a person with the authority to sign a negotiable instrument, indicating a transfer of ownership. A common example of an endorser is the payee of a check; the payee must sign the check to cash it or deposit it in the bank, or to write it over to a third party. Obtaining an endorsement is necessary to transfer a wide variety of property and negotiable instruments, and it is also important that they be endorsed properly. A missing or incorrect endorsement can interfere with a smooth transfer and may potentially create legal problems.
Negotiable instruments include title deeds, certificates of security ownership, and promissory notes. In all cases, the document contains a promise to pay or documentation of ownership. Many such documents include a space for an endorser for the purpose of transferring the security, and additional pages of endorsements may be attached in some cases. Spaces for endorsement may include several lines, allowing for multiple transfers and permitting people to note details related to the transaction.
Once a negotiable instrument has been endorsed, it passes out of the ownership of the endorser and into the ownership of someone else, and this usually cannot be revoked. If a person is fraudulently led to endorse an instrument or does so under duress, it may be grounds for a suit and it can be possible to recover the property in the course of the suit, if the suit can adequately demonstrate the problems with the endorsement. One issue with negotiable instruments is the lack of security associated with them, as they are designed to be freely transferred and this can make it easier to perpetrate fraudulent transfers.
Some things that can make an endorsement suspect or incorrect include a blatantly unusual signature, suggestive of a forgery attempt, endorsing in the wrong location, or failing to follow the directions for endorsement on the document. Many people have a variation in their natural signatures, but a markedly different signature by an endorser would attract attention and could lead to an investigation into the circumstances of the endorsement.
In the financial sense, “endorsement” refers to approving or accepting the terms of a contract, as when people endorse loan paperwork, as well as to preparing a document for transfer. The sense of “approval” can also be seen outside the financial world in the context of political endorsements during election years, or product endorsements used in advertising.
I remember dealing with endorsements when I got my car title changed. I had recently gotten married, and my maiden name was on there, in addition to my dad’s name. I needed to have his name removed and my last name changed.
I had to go the courthouse and show them my marriage license and driver’s license. They said they would send me a new title in 6 weeks.
My dad had to endorse the original title in order to transfer sole ownership to me. It really seemed like a lot of paperwork for a family transaction, but I know they have to do everything by the book.
My husband is the endorser for checks made out to his company. His signature reminds me of either a doctor’s handwriting or a celebrity’s autograph. It is impossible to read, but it is distinct.
When I first saw the way he endorsed the checks, I became worried that the bank would not cash them. He told me that he has always signed his name that way.
One advantage is that it is really hard to replicate. Unless you were to sit down, study it, and practice making it, you couldn’t do it. The bank can easily tell his signature apart from someone who simply tried to write his name down and get away with it.
I recently got a credit card from a department store. They sent it to me in the mail, and I didn’t read the back of it.
The first time I tried to use it at the store, the cashier flipped it over. Then, she asked to see my I.D., because I hadn’t signed the back of my card.
Apparently, you have to endorse all your cards. There is a white strip on the backside, and underneath it, there is a line that states, “Not valid unless signed.” I suppose since they have my signature on file from the first time I signed up for a card, they need to compare it to the one on actual card.
I always worry when I endorse my paycheck that my signature may be too different from the last one. I don’t always make my letters the same. I don’t know why, but they just come out sometimes in cursive and sometimes printed.
So far, I have never had a problem getting my checks cashed or deposited because of my endorsement. I guess my letters are similar enough to satisfy the teller.
I remember finding out that someone else can give you a check with their endorsement, and all you have to do is endorse it underneath their name, and the money is yours. I really worried the first time I took a check like that to the bank, because it just seemed like it would be illegal! I mean, how does the bank know I didn’t just find this check in the parking lot and sign my name under the first one? It worked, though.
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