Signing your name on a document or check seems a pretty straightforward process. So does endorsing a check, not just for yourself, but for a spouse or child who's out of town. In fact, all of these can have unpleasant legal ramifications depending on how you do them.
The Ink-Color Question
Think twice about the pen you use to sign a credit-card application or check. Opt for a pen with the wrong-color ink, and you could trigger a fraud alert or nullify the check.
Surprisingly, the wrong-color ink can be black: Signing a credit-card application in black ink could have the document’s validity challenged, says Jim Angleton, president of Aegis, a corporate prepaid debit- and charge-card issuer. “If you’re applying for a credit card in person, your bank may ask you to sign the application in blue ink.”
That’s because blue ink is harder to reproduce and easier to spot on paper that’s typically filled with lots of black (fine) print. And, Angleton says, because black ink is the most widely used printer-ink color, it’s the easiest color to duplicate or copy via home software and printers.
“Blue ink is preferred because when black ink is used, someone at the bank or credit-card company may not be able to tell whether they are looking at a photocopy of a signature or an originally inked signature,” says Cina L. Wong, CDE, a certified and court-qualified forensic handwriting expert. “It's easier to assume that the document is 'original' if it is signed in blue ink.”
“We advise signers of our documents to use blue ink as it offers contrast to our applications, which is especially beneficial should there be any ID issues in the future,” says Angleton.
Ink color matters on checks, too.
Signing a check or endorsing the back of a check in red ink could trigger trouble by delaying payment of the check. In extreme instances of fraud prevention, it could even void the check’s validity.
“Red ink has been considered a warning color since the Cold War era,” says Angleton. “And the thinking that red is a warning color lingers today.” Long ago, bank proofers used a red pen to circle the signature on a check if they suspected it to be fraudulent. As a result, the color remains stigmatized in the financial industry.
In the days before color copying, red didn’t photocopy well, either. Because it would appear faint or non-existent on a photocopy, red pens were considered taboo for signing or endorsing checks, says Wong.
“Today, scanners that read documents use a red laser light,” Wong explains. “When the red laser light scans the document, it turns the entire document a red color. So a signature written in red ink appears to vanish.”
Trendy and fun ink colors such as green, pink or purple can be problematic on checks, too. In general, most checks are imaged, or scanned, using a super high-speed scanner. Some types of scanners are unable to detect or decipher unusual colors like pink or green, which means that a check might not be properly applied or might have processing issues.
Wong says that’s one possible explanation for why most government documents state "please sign in black or blue ink."
Signing for Your Spouse
The color of ink you use isn't the only potential legal pitfall signatures can bring. Signing your spouse’s name can cause a headache if you’re not careful.
Let's say your spouse is out of town and you want to deposit an expense check or rebate made out to your mate. You could find yourself in legal trouble.
Even if you're legally married and have a joint bank account, it’s illegal to endorse your spouse’s name on the back of a check, says Charles R. Gallagher III, an attorney at Gallagher & Associates in St. Petersburg, Fla. Technically, signing someone else’s name is fraud. And that could lead to the check being denied for payment and even to your arrest, if your spouse were to press charges.
Many think the workaround to fraud is simply signing "For Deposit Only" on the back of the check. But Gallagher says that tactic is far from foolproof. If your spouse gets angry, he or she still could press the legal issue and claim you stole the money.
The safest approach is getting written authorization that it’s OK to sign a spouse’s name on checks when he or she is unable to. “You can always obtain a formal power of attorney to ensure the bank won't give you a hassle,” says Gallagher.
Letting Someone Sign for You
Got a taste for take-out Chinese but don’t feel like picking up the food? Don’t send your child or friend to the restaurant with your credit card.
“You sign a legal contract with the credit-card provider that authorizes only you to use the credit card. You’re breaching that contract when you give another permission to use your card,” says attorney Stephen Lesavich, Ph.D., author of “The Plastic Effect: How Urban Legends Influence the Use and Misuse of Credit Cards.”
“That breach may result in cancelation of the card based on the terms of the credit-card contract you signed,” Lesavich adds.
Your credit-card company may never know you gave your spouse, BFF or kid your credit card to use. So the charge may sail through the system without any issues.
But the person you send to pick up your food could hit a snag if the merchant asks for identification, especially if the signature on the card doesn’t match the one on the receipt. “A merchant could report fraudulent use to the credit-card company,” says Lesavich. Being accused of making or permitting fraudulent credit card charges could be embarrassing to both of you. It can also result in the credit-card company canceling the card and/or putting a hold on it based on a purchase you would normally not make.
You’re also opening yourself up to potential loss.
Frequently permitting a child or pal to use your credit card may be viewed as you having authorized that person to act as your "agent."
“That person may incur additional charges you are responsible for, but did not initially authorize them to make or intend for them to make,” says Lesavich. “That’s why it’s important to remember that you are financially responsible for all charges for any authorized use of your own credit card by you or another person.”
Signing Your Child’s Name
Unless you’re depositing the money into your child’s personal bank account, it’s illegal to sign your – or your child’s – name on the back of that check Grandma sends to a minor for a holiday or birthday present.
“Banks usually have policies on how they want a check made out to a minor to be endorsed,” says attorney Matt Reischer, Esq., CEO, LegalAdvice.com. “Some banking institutions want the child’s name spelled out and designated parenthetically as a minor with the parent’s signature underneath.”
Other banks may want the check endorsed “For Deposit Only,” followed by the child’s bank account number. That’s why it’s best to verify with your bank about its endorsement policy to prevent Grandma from having to issue a new check.
Once your child is over 18, check-signing rules are the same as for your spouse. Unless you have a power of attorney or written authorization, signing your child’s name on the back of a check could be viewed as fraud and lead to the bank or your child taking legal action.
The Bottom Line
Let your spouse and grown-up child sign their own checks – never in red ink – and get authorization if you need to bank on their behalf. Stock up on blue-ink pens and save the fancy ink colors for birthday cards. You'll stay out of legal trouble.