A check is an order on a third person (the bank) to pay a specified sum and is sometimes described as a three-party instrument (the parties being a drawer, a drawee or payor bank, and a payee.)
A note is a promise by the maker to pay a specified sum and might be described as a two-party instrument (the parties being a maker and a payee.) Also, the note does not represent the paying out of assets.
Types of Checks
Government Check or Warrant
Instruments payable on demand and drawn by the government or on the government (i.e., Treasurer of the United States) are generally regarded as government checks. Warrants issued by a state or local government or governmental agencies are also treated as checks if they are payable on demand.
A cashier’s check is simply a bill of exchange or a draft drawn by a bank on itself. In many instances, cashier’s checks are bought by a customer of the issuing bank to be used for a payment when a check signed by an authorized representative of the bank is desired. The purchaser is not a party to the cashier’s check unless he is named as the payee or adds their signature or endorsement to the instrument.
Teller Check or Bank Draft
A teller’s check is a draft drawn by a bank on another bank or payable at a bank. A “teller’s check” is equivalent to a “bank draft.”
A certified check is a check accepted by the bank on which it is drawn. Acceptance may be made by the bank’s signed agreement to pay the check as presented or by writing on the check that indicates that the check is certified.
A traveler’s check is a device intended to provide an instrument with the marketability of cash and the safety of a bank draft. This procedure makes it relatively easy to cash such an instrument where the owner-purchaser is unknown to the cashing party. The purchaser is protected against loss of the instrument if it has not been countersigned.
Bank Money Orders and Personal Money Orders
There are three parties to a money order: the remitter (payor), the payee, and the drawee.
Another form of check now used and sold by banks, merchants, and others is the personal money order or registered check. Whereas bank money orders are often signed on behalf of the issuing bank, personal money orders generally resemble ordinary checks. They are issued with unfilled blanks for the name of the payee, the date, and the purchaser’s signature. Only the amount is filled out at the time of issue, which is often done by checking the writer’s impression.
What Is a Check?
A check is a written, dated, and signed instrument that directs a bank to pay the bearer a specific sum of money. The person or entity writing the check is the payor or drawer, while the person to whom the check is written is the payee.
Checks permit two or more parties to perform a transaction without using physical currency. Writing a check is a way to tell a bank to transfer funds from one account to another.
Why Are Checks Helpful?
You can use checks to make payments, give as a gift, or transfer money between two entities. They are a secure way to move money since the payee is the only one who can instruct the bank to transfer the funds to their account. If a check is lost or stolen, no one else can cash the check.
A cashier’s check is drawn against the bank’s funds, not the money in your checking account. To obtain a cashier’s check, you transfer funds from your checking or savings account into the bank’s account (plus a small premium for the service). A bank representative then issues the cashier’s check with the bank’s name and account information and the names of the payee and remitter. The funds are usually available to the payee by the next business day.
When you write a certified check, the money is drawn directly against your checking account, and your name and account number appear on the check.
Which Is Safer?
Assuming that the check is genuine, both cashier’s and certified checks are secure forms of payment. However, a cashier’s check is generally the safer bet since the funds are drawn against the bank’s account, not a person’s or business’s account. Plus, certified checks do not have the same watermarks as cashier’s checks, making them slightly easier to fake.
Should I Beware of Check Fraud?
Fraudulent check scams can take many forms, but one of the most common involves a scammer passing off a fake certified or cashier’s check as payment for a purchase. Let’s say, for example, that you have a car listed for sale through an online marketplace.
The scammer contacts you to say they’re interested and presents you with an official-looking check from a bank as payment for the car. However, after you’ve deposited that check, the bank tells you it’s a fake. The Office of the Comptroller of the Currency warns against this scam.
You may have written checks or made purchases with your debit card against that amount by that time. If those debit payments are returned or your checks bounce, you have overdraft or non-sufficient funds (NSF) fees.
The FTC and Office of the Comptroller of the Currency (OCC) offer tips for avoiding fraud involving cashier’s checks and certified checks. First, carefully consider before accepting official checks from people or businesses you don’t know well. Suppose a buyer asks specifically to pay with a certified or cashier’s check. In that case, you might want to suggest an alternative payment method, such as an escrow service or online payment.
If you decide to accept a cashier’s or certified check as payment, call the bank that issued the check to verify whether it’s the real thing. Look up the bank’s phone number online rather than dialing the number printed on the check (which could be fake).
Finally, if you receive a cashier’s or certified check that you weren’t expecting, think twice before depositing it in your account. Lottery and sweepstakes scams are other forms of check fraud.
Types of Agencies and Programs
Government agencies perform three kinds of services:
- Implementation – When the legislative branch of the government creates a law or policy, there is a coordinating agency charged with implementing the law. For example, when the government passes environmental law, it may use the Environmental Protection Agency to implement the law.
- Entitlement – Entitlement agencies are designed to provide benefits to and guarantee the rights of people. An example of an entitlement agency is the Social Security Administration. The Social Security Administration provides retirement and disability benefits to people entitled to them.
- Enforcement – Some agencies are created to enforce the law. An example of an enforcement agency is the Department of Justice. The Department of Justice investigates violations of the law. They also arrest and charge those who have criminally violated the law.
Do I Need an Attorney Experienced With Banks, Government Agencies, or Programs?
An attorney can help you better understand your matter and your rights in dealing with whatever government agency or bank you have a conflict with. More importantly, an experienced financial lawyer will know what you can do to resolve the conflict.
Bank crime charges can involve very serious legal matters. You may need to hire a criminal defense lawyer for help if you have been involved with such charges. Your attorney can provide you with the legal assistance needed during such trials. Your lawyer will be able to represent you in court and can address any questions you may have during the process.
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