What is Cheque endorsement?

Case breakdown: Movie Ghost

The scene that you saw is from the movie Ghost. You can see Oda Mae Brown (played by Whoopie Goldberg) has formed a connection with the other world, where she can clearly hear Sam wheat (played by Patrick Swayze) who is already dead (Ghost). Oda Mae Brown has a cheque of $ 4 million in the name of Rita Miller, for which Sam wheat was killed. He asks her to donate the money to St. Joseph’s Shelter by endorsing the cheque she has.

In this blog, we will try to understand what exactly endorsement of cheque means.

Who is an Endorser?

An endorser is any person who has the authority to sign the cheque (or a negotiable instrument) and transfer the ownership of it to another party. In this case, Oda Mae Brown is the endorser and she is transferring ownership to Saint Joseph’s Shelter. This process of passing ownership is referred to as endorsement.

What is Cheque Endorsement?

As you saw in the scene, one needs to sign at the back of the financial instrument. In this case, Oda Mae Brown signs with the name of Rita Miller on the back of the cheque and also writes the name of Saint Joseph’s Shelter (Payee). In this way, that cheque of $ 4 million is transferred to the shelter. If this process is not done correctly, the bank may return the cheque to the issuer.

Check-points while Endorsing:

1. Using a black or a blue pen helps during the endorsement process. Writing with a pencil is not a great idea, as it can be susceptible to fraud.
2. Don’t sign at the back of the cheques and keep it, if they fall into the wrong hands, they can present the cheque to the bank and get that money.
3. All details should be double-checked. The name of the payee and signatures should be correctly mentioned and clearly signed respectively.

Every day, millions of cheques are issued and endorsed. It is important to remain safe by being aware of one’s own actions.

Understand Cheque Endorsement with a Video