Why You Need to "Check" the Check

Authors: Andrew M. Thaler & Spiros Avramidis.

Third party payment of the debt of another is not unusual.  Parents pay student loan obligations of children; companies pay personal expenses of owners.  However, accepting third party payment poses risk. Specifically, recipients of third party checks place themselves at risk of having to disgorge payments if the payer is in bankruptcy or insolvent.  Banks that process thousands of transactions each day are most vulnerable to disgorgement actions. 

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