What is Cheque endorsement?

Learn about Cheque endorsement with Ghost

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 millions, 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?

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.

How is it done?

As you saw in the scene, one needs to sign at the back of the financial instrument. In this case, Oda Mae Brown signs at the bank 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, bank may return the cheque to the issuer.

Check-points while Endorsing:

  1. Using a black or a blue pen helps during 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 falls in wrong hands, they can present the cheque to the bank and get that money.
  3. All details should be double checked. Name of 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 about one’s own actions.

Written by: Ms. Gitika Chandra

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