To avoid the risk of loss from theft, a holder may convert a blank indorsement to a special indorsement.

Question

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A blank indorsement means the holder has only signed their name on the back of the check, leaving the space for the name of the new recipient blank. This makes it easier for someone to steal and cash the check. However, a special indorsement restricts payment to the person named in the endorsement, reducing the risk of theft. Therefore, converting a blank indorsement to a special indorsement can help avoid the risk of loss from theft.

To Avoid the Risk of Loss from Theft, a Holder