Legal Question in Business Law in California

I have a business where I locate unclaimed funds for people across the country. The problem is the entities that pay out send the check to me made out to: either my clients name only, to my name AND the clients name, or to my name in trust for the client, etc. I have spent a lot of time and been to a lot of banks (I'm in California) and none of the banks will accept my Limited POA giving me permission from the client to deposit the check and pay out the client's portion to them.

The banks say "they are not comfortable" even with my POA. They say they cannot verify if the “John Smith” that notarized the POA that I am showing them is the same “John Smith” truly entitled to the funds. They are worried about fraud. Of course I had to prove with documentation to the entity that I have the right John Smith before they ever issued the check to begin with. But this doesn't sway the banks. I have talked to several attorneys with no solution. I know attorneys in California have trust accounts set up to disburse client’s funds out but I am not an attorney. Anyone have a solution?

Asked on 7/19/13, 2:22 pm

1 Answer from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I would treat this as a banking problem, and start out by going one step higher in the bank's hierarchy to find an officer who can give you a permanent and workable solution.....and of course, you may have to canvass a half-dozen or more banks to find one that will give you an assured relationship. I suppose there are two other possibilities you can offer the bank that might facilitate getting a workable banking relationship. One is to provide a bond of some kind, protecting the bank against fraud. Another is to use the bank's own power of attorney form; I've found that there is frequent resistance to honoring POAs that are of unfamiliar wording or format or from another state. Lastly, you may simply have to find a way to get the remittances made differently......perhaps direct to the beneficiary/owner, and you collect your commission separately. There are court processes, e.g., "interpleader," where a holder of funds who isn't sure who's entitled to them can have the court hold the funds while a judge sorts out conflicting claims, but it's doubtful this would be of assistance with regard to your more routine cases.

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Answered on 7/19/13, 2:48 pm

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