Back of Check Images are Blank and not Endorsed

Question

I write a monthly check to my condo board of directors' management company for unit dues. I mail the check out of state to Nevada as specified on the monthly payment coupon. Up until a few months ago, the check image provided online by my bank showed the back of my check with the name of a bank, the bank's ABA routing number and a check trace number...in other words an endorsement by the management company receiving the check.

Now, however, the check image has no such endorsement. That is, the back of the check image is blank. My bank tells me that unless there is an endorsement such as I described above, the bank cannot tell me where the disbursement from my checking account actually ended up.

When I ask if there is an electronic audit trail from my checking account to the management company in Nevada, all I get is evasive mumbo jumbo about check clearing procedures which my bank claims it is ignorant of without said endorsement. The management company on the other hand tells me that there is in fact a bank in Nevada where my check is deposited. However, the bank name I'm being given is a "doing business as" division of another bank. The management company will not tell me anything else. Plus, condominium law in my state does not require that I receive a monthly or even an annual statement showing that my monthly checks are actually being received in Nevada.

The board of directors on the other hand simply refuses to answer any questions, instead deferring to the management company it hired to receive and process my monthly checks. Where is the disbursement from my checking account actually ending up?

Answer 1

In general, a lack of endorsement (meaning nothing written by the receiver on the back of the check) is equivalent to it being endorsed "as deposit only" to a bank that the depositor has an account with. (See Uniform Commercial Code §4-205.) That is, the bank that receives a deposit without any endorsement promises to the banks that process the check along the line all the way back to your bank, that they properly deposited the money into the account of the entity that the check was made out to. With checks being processed with more and more automation, it's getting fairly common for there to be little writing needed on the check itself, as the digital copy gets submitted to the banking system for clearing.

If you're concerned about there being some sort of fraud, that perhaps the entity that you're sending money to isn't the ones that should be getting it, or that they're not actually getting the money, or something like that, that's really an entirely different concern. I would expect that if you were saying that you paid something, and the payee said that you hadn't, that you would dispute the transaction with your bank. They should be able to follow the electronic trail to where the money went, but I suspect they only do so as part of an investigation (and possibly only in an investigation that involved law enforcement of some type). If you're just curious about what bank account number your deposit went into, then it just looks like you're the one trying to commit some sort of fraud (even if you're just being curious), and they don't have much incentive to try to help you out there.