Commercial Collection Agencies of America

Advice for Handling Unsigned Checks

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Last month, we reviewed Aspen Publisher's Complete Guide to Credit and Collection Law, written by attorneys Arthur and Jay Winston. One of the nice features we noted in our review was its liberal use of "credit and collections tips" throughout the book.

Here are a couple of examples:

In a section on unsigned checks, the Winstons explain that "a check that is unsigned may be deposited by the recipient by endorsing on the reverse side of the check the payee's signature and guaranteeing to the bank the signature of the maker of the check.

When the check is presented to the maker's bank, the bank accepts the check and transfers the funds. The maker who receives the debit on the bank statement will not contact the bank since he or she believed the check was signed. The maker who did not sign the check deliberately will contact the bank which, in turn, will contact the depositor's bank and assert no signature.

The bank will charge the depositor's account and the depositor will be in no worse position than if the check was returned to the maker for signature. The only expense incurred is the charge of the bank for returning the check."

In the letters of credit section, Winston writes: "A business utilizing letters of credit should obtain the Uniform Customs and Practices for Documentary Credits. Almost all letters of credit issued by banks, both domestic and foreign, are issued under the provisions of the UCP. Counsel for the banks are familiar with the provisions and you should also be familiar with the provisions of UCP before you undertake the use of letters of credit."

Our review stated that the Aspen guidebook would be an excellent accompaniment to NACM's Manual of Credit and Commercial Laws, but we neglected to say how to order it either of these excellent reference manuals.

For NACM's Manual, go to, and click on "bookstore." The price is $70.

For the Aspen manual, go to, and click on "Finance and Economic Forecasts," and then "Credit and Collections," to find it. The price is $115.

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