What is a Gold Medallion Stamp?
Numerous legal and financial documents require signature guarantees or medallion stamps to prevent fraud, verifying that their signer is authentic. Many banks as well as savings and loan associations and credit unions provide this service.
For a signature guarantee, it is necessary to submit current, non-expired government identification as well as a statement of ownership. Additionally, medallion stamps may be requested when giving away shares as gifts or administering estates.
Legality
Although medallion signature guarantees do not carry legal weight, they provide an additional level of security against fraudulent or unauthorized transactions. A stamp verifies that signers of documents are who they claim they are, which significantly lowers fraud and identity theft risks. Furthermore, being part of a medallion program signifies liability in case any forgeries occur within an institution’s walls.
Many banks, credit unions, and brokerage firms provide medallion signature guarantees as an added convenience for customers. Unfortunately, however, it may be unlikely they issue one to someone without an account with them due to exposure of large financial liabilities; as they would have little incentive in doing so.
A medallion signature guarantee differs from notary seals in that it verifies the identity of individuals signing various types of documents. Notaries are public officials governed by state law who offer their services.
Requirements
Some institutions require medallion signature guarantees as part of certain transactions, which are backed by assets owned by the financial institution and typically come at a cost. Furthermore, this type of guarantee often verifies whether or not the person applying for one is an established customer of that institution.
As opposed to notaries, institutions offering medallion signature guarantees won’t focus on you and your identity; rather, their bank assets and promises of reimbursement in case anyone impersonates you will take precedence – something notary seals don’t provide for. Consequently, this stamp differs significantly from its notary seal counterpart.
Most banks, savings and loan associations, credit unions, and brokerage firms will offer medallion signature guarantees; however, due to identity theft and fraud concerns they will only offer it to established members of their institution. Furthermore, each stamp now contains a barcode with invisible security compound which can only be read using Stamp 2000 Plus scanners used by transfer agents.
Benefits
Medallion Signature Guarantees (MSGs) verify your identity, signature, and legal capacity when transferring ownership of securities or investments between financial institutions. They limit financial institution liability while also being used for things such as moving 401(k) accounts between institutions or transferring a person’s estate assets from one to another institution. A MSG can be obtained from banks, savings and loan associations, credit unions or brokerage firms.
Banks or institutions providing Money Service Gadgets will charge a nominal fee for this service, typically only offering it to existing customers. Furthermore, each stamp must contain an MSG-specific stamp type with a unique prefix that displays its value.
One reader reported that local branches of Citibank, Wells Fargo and HSBC only offered Medallion Signature Guarantee services if someone were an existing customer of their bank; Bank of America however was willing to provide it without requiring an account with them – possibly because banks are concerned about both costs and risks involved with providing this type of guarantee.
Scams
Many are unaware that a medallion signature guarantee differs from a notary stamp in terms of what it certifies: while a notary’s stamp simply verifies who signed, while the latter guarantees ownership of assets involved. Financial institutions that offer this service often require proof of identity before providing such guarantees at a fee.
Only financial institutions and certified bank officers are qualified to issue medallion signature guarantees, such as commercial banks, savings and loan associations (a thrift), credit unions and broker-dealers who belong to the STAMP Program can provide such guarantees. Members pay Kemark an annual subscription and purchase bar code scanners and special ink that is read by document readers; additionally certain financial institutions have additional verification requirements when processing certain types of transfers such as gifts to charities or death certificates.
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