Signature Guarantee Compared to Notary Public


A signature guarantee has much in common with a notary.  Both are used to authenticate documents, but they mean different things.  A medallion signature guarantee is typically only used for the transfer of securities.  A notarization is used for a wide variety of documents.  The liability associated with the agents who process the documents also differs.  Here is a summary of the key differences between a notarization and a signature guarantee.

Key Differences:
  • Qualification - A notarization can be performed by a notary public.  This is a credential that can be easily earned by just about anybody.  A test and fee are required to receive the designation of notary public.  To issue a signature guarantee, however, an agent must belong to an organization that participates in one of the sanctioned signature guarantee programs.  Usually only certain employees at banks and brokerage houses can issue a medallion signature guarantee.
  • Liability - A notary public only certifies that the signature was not made under duress.  Therefore, the notary has little liability in the transaction.  A signature guarantee, however, places the issuing party under liability if there is fraud associated with the signature.  This means that a signature guarantee invokes greater liability on the issuing institution.
  • Availability - Since notaries public are widely available, getting a notarization is a relatively easy process.  Getting a signature guarantee, however, can be more difficult, since far fewer institutions will issue one.
  • Use - A signature guarantee is used for only a few types of transactions, usually dealing with the transfer of securities.  A notarization, on the other hand, is used on a wide range of documents, from wills to leases to power of attorney forms.
  • Guarantee - A notarization makes only a weak guarantee that the signature was not made under duress.  It makes no claim toward the validity of the signature.  A signature guarantee, on the other hand, actually guarantees the validity of the signature.  The agent must compare the signature on the document with that of the signor on his/her identification.