What happens when you cash a two party check with one signature?

Question

I cashed an insurance check make to me and my insurance company thinking it was mine because my name was on it, the bank looked at it and cashed it then 2 days later called saying they made a mistake. They are now waiting to see if the check will clear how long will this take and what happens if the check is now denied and the half the funds were spent?

Answer 1

"Waiting to see if it will clear" ???  OK, I'm not sure why an insurance company would make out a check to you and an insurance company. You and a leinholder or you and a contractor maybe.

If your bank presents the check and the issuer hasn't stopped payment THEN the 2nd party on the check could say: "where's my money?   Your bank will then have to make good on what they're owed (see it was their job to make sure the check was properly endorsed to begin with (teller training 101)).  They'll research the signatures, figure out it wasn't properly endorsed and come after YOU for the money.  The 2nd party could go after you for check fraud, but they'll find it easier to go after the bank for payment.

If you've spent it already, the bank will take it from other $$ you already have.

You shouldn't cash checks made out to two parties; after all, you probably wouldn't want someone doing that to you.