A third party is a third person or entity who instructs the “owner” of the account on what to do with the funds in the account or directs the activities in the account. The third party acts informally, i.e., without power of attorney or official authorization.
Attention - The following individuals and entities are not third parties:
the account applicant;
the account co-applicant;
a person who has authorization to act in the account (attorney, authorized representative, estate executor, legal guardian, curator, etc.);
Examples of a third party:
While travelling abroad, Anne asks her sister, Kim, to open an account for her so that Kim can deposit money that she owes Anne. Kim, who does not have official authorization to act on Anne’s behalf, opens the account in her own name, ensuring that the account will only be used for her sister’s benefit. In this case, Anne is the third party for whose benefit the account is opened.
John takes out a personal loan in his name to pay for a new car purchased by Julie, who is a student. Julie is considered to be a third party since she is the one who is actually repaying the loan that she would not have been able to obtain on her own because of her low income.