DEFINITION of 'Signature Guarantee'

A form of authentication issued by a bank or other financial institution that verifies the legitimacy of a signature and the signatory's overall request. This type of guarantee is often used in situations where financial instruments are being transferred. In most cases, the guarantor accepts all consequences in the event that the signature is fraudulent.

BREAKING DOWN 'Signature Guarantee'

With the number of crimes related to identity theft rising each year, using a signature guarantee service is a great way to prevent others from capitalizing on your identity in order to commit fraudulent acts.

In order to provide some sort of signature guarantee, a financial institution must be a member of a recognized securities guarantee program, such as Medallion.

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RELATED FAQS
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    Find out how bank guarantees work, why they are issued and the process that a business normally goes through to acquire one ... Read Answer >>
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    Read about the differences between a traditional bank loan and a bank guarantee, and why a third party might require a guarantee ... Read Answer >>
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  4. Are U.S. banks authorized to issue bank guarantees or medium term notes (MTNs)?

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