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Acceptance of mobile deposits via smartphones isn’t a new idea. A West Virginia credit union became one of the first financial institutions to deploy a smartphone app for mobile check deposit in 2009. Nearly 88 percent of Americans accessed their checking accounts using a smartphone or tablet in 2022, just 13 years later, and more than half of that group mobile-deposited one or more checks in 2022. As mobile deposits have become more popular, however, financial institutions have experienced growing losses because of one significant risk inherent in the service —the risk that a check will be deposited more than once.
In this hour-long presentation, BankersOnline’s John Burnett will briefly review the history of remote deposit capture and mobile deposit services and the reasons each of these services increases the risk that a single check may result in multiple presentations for payment.
You will hear about—
- Differences between conventional deposits and remote deposits of checks
- The risks that remote deposit captured checks may be re-used
- Why mobile deposited checks present still greater risk
- Defensive attempts of paying banks
- Clearinghouse duplicate use detection
- Returning an item that’s already been paid/duplicate presentments
- The check issuer as the final defense
Regulation CC has an indemnity rule applicable to losses involving multiple presentments of RDC and mobile deposited items. We will cover —
- How depositary institutions accepting RDC and mobile deposits can avoid indemnity claims from depositary institutions that later accept for deposit the physical check from which the RDC or mobile deposit was created
- The importance of requiring RDC and mobile deposit customers to use a restrictive indorsement
- Avoiding mobile deposit fraud using “phony” check back photos
- How depositary institutions can avoid accepting for deposit a check that has been previously deposited via RDC or mobile deposit
- The mobile deposit “checkbox” appearing on the reverse of some checks
- Funds availability and mobile deposits
Questions and Answers