Joint check agreements are popular in the construction industry. In fact, they are so commonly used they are often referred to as a “construction instrument,” insinuating that they are exclusively used in that industry. Also common, unfortunately, is joint check agreement fraud. This post explains where joint check agreement fraud occurs and helps you understand and prevent it.
Forged Signatures on Joint Check Agreements
Subcontractors are under pressure to get materials to perform their scope of work on time and within budget. If a material supplier refuses to extend enough credit to get the job done, it could lead the subcontractor into a desperate situation. The solution to their problem may be a joint check agreement. But what if the general contractor refuses to agree?
Subcontractors and others with credit problems have been known to forge a general contractor’s or developer’s signature on a joint check agreement. You should understand that this occurs in the industry, and it is a good practice to send an email or make a phone call to the general contractor or developer to confirm that they did indeed sign the joint check agreement and understand their obligations.
Forged Endorsements on Joint Checks
Forging signatures on joint check agreements is less common than this more troubling joint check fraudulent act: forging a check endorsement.
Subcontractors in need of cash may get their hands on a joint check and forge the other party’s signature on it to deposit it on their own. They may have good intentions to pay you, but may come up short because of cash flow issues.
If this happens, you should contact the maker of the check (the general contractor / developer) and have them file a fraud report with their bank. If this is done soon enough, it’s possible that the bank will be capable of reversing the deposit. You may also have a civil action against the company forging your signature for fraud.