Cheques A cheque is an order to a bank to pay someone named (payee) an amount of money which someone (payer) has on deposit. Cheques are generally used much too carelessly today.

They have become so commonplace that we have lost sight of the inherent dangers in their use and do not often use the simple safety precautions available to us. While used almost daily by many people, cheques are not really understood as they should be. Here is a description of the common types of endorsements, and some safety rules. When you sign your name on the back of a cheque you are endorsing it. By this action you transfer your ownership title in it from you to someone you name, or to the bearer of the cheque if you do not name anyone. In addition, you admit receiving value for the cheque and you guarantee payment to the person you give the   cheque to, in the event that the cheque is not honoured by the person issuing it (payer). The types of endorsements most commonly used are the endorsement in blank, the endorsement in full or special endorsement, the restrictive endorsement, and the double endorsement.

(a) The endorsement in blank: This is the simple type of endorsement most commonly used. It requires only the payee's signature which changes the cheque to a bearer cheque, that is, a cheque which may be cashed by anyone. The endorser implies his guarantee of paymen to the holder.

(b) The endorsement in full: The endorsement in full requires the signature of the endorser plus the name of the party to whom he guarantees payment. The second party named must in turn endorse the cheque before cashing it, or in some other way transfer the title to someone else.

(c) The restrictive endorsement: This endorsement is often used as a safety measure. It requires the signature of the party to whom title is transferred. The endorsement involves the use of the words, "pay to... only", this expression making further transfer of the cheque impossible. The cheque cannot be further transferred or endorsed to another person, and only the party specifically named can receive payment from the bank. Restrictive endorsements are often used when people send cheques payable to themselves through the mail, to be deposited to their account. This type of endorsement ensures that the cheque is valueless to anyone but the payee in his account at the bank branch mentioned.

(d) The double endorsement: The double endorsement is used when the cheque is wrongly made because the name of the payee is incorrectly spelled. The endorser first signs his name as it appears on the cheque and then signs his name in his customary fashion. A married woman may use this type of endorsement if her Christian name is not shown on the face of the cheque. 

Here are some rules for using cheques safely:

(1) Never sign a blank cheque. This may seem to be a thing you would never do, but in the rush of the moment you might. Signing blank cheques is often prevalent in service or social organisations which for protective reasons have a joint account. Very often the treasurer persuades the co-signer to "Sign some cheques in advance so that I won't have to wait until I see you again." If you feel that this request is in the best interests of the club, propose at the next meeting that there be only one signer for your cheques; if you sign a blank cheque, you are surely putting the proposal into effect without allowing the club to discuss it first!

(2) Do not endorse any cheque until you are ready to cash it. If you do endorse it, the cheque immediately becomes a bearer cheque which may be cashed by anyone.

(3) Insist that cheques from people you do not know be endorsed in your presence, even though they may have been endorsed once already. The handwriting may help the police if the cheque is a forgery, and the request itself may make a forger think again.

(4) When you mail cheques, put more than the cheque and the bill in the envelope. Cheques are easy to spot, without your help, by thieves who may be looking for them.

(5) Get into the habit of looking closely at any cheques you accept to ensure that they have not been altered. Nine is easily changed to ninety, and Blake Co. can be changed to Blake Cottrell and be cashed by any individual purporting to be Mr. Cottrell.

(6) When writing cheques in a public place such as a bank or office, make sure that you destroy or burn spoiled cheques. If you do not, you may give a forger an excellent opportunity to discover your account number, your bank, your signature, and if the spoiled cheque is written for a specific amount, some idea of the amount of the money you have in the bank.

(7) When writing a cheque, fill in all blank spaces with a horizontal line. Leave no blank space between the written dollar amount and the cents figure, and close the loops at the end of your words. Open loops make it easy for the forger to change your cheque.

Some people, while not being supported by the state in prison, make a living by forging cheques or by increasing the value of genuine cheques. Both types of forgery are relatively simple things to do. There is no need for you to make it easier for the forgers.

It is estimated that more than $30,000,000 of forged cheques are passed every year. In recent years, forged cheques have been successfully used to withdraw money from the federal finance minister's account and from a cash account of the RCMP. In one year alone, the RCMP in Ottawa reported that more than 6,000 forged cheques were brought to their attention. Many small retailers do not report forged cheques that they have accepted, and therefore make it harder for the police to catch the forger. It is easy to understand the retailers' reluctance.