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The mobile banking feature that allows customers to deposit checks using their smartphones is now available at many banks and credit unions. Several readers have commented about the potential of fraud and abuse with this service. For example, how will banks prevent scammers from depositing a check into multiple accounts? This American Banker article, Mobile Check Deposit Boom Brings Risks, has an interesting review of the issue.
According to the article there have not been major outbreaks of fraud with mobile check deposit. The article cited restrictions that banks place on mobile check deposit that have helped prevent fraud. Unfortunately, these restrictions have also reduced the usefulness of mobile check deposit. These include banks setting daily deposit limits, placing holds on the funds and setting time and/or relationship requirements before customers can deposit checks remotely. One example is the $3,000 limit per check at Capital One 360. At USAA Bank, only certain customers are allowed to use this service, what they call USAA Deposit@Home. Customers must either be eligible for USAA auto or property insurance.
Although fraud hasn’t been a major issue with mobile check deposit, the problem is growing. According to the article a common issue is customers double depositing. Not all of these cases have been fraud. Mistakes are possible. One potential mistake described by the article is a case in which a man deposits the check using his smartphone and leaves the check someplace easy to find. Then his wife finds it, assumes it hasn’t been deposited, and then deposits the check at a branch. One method banks use to reduce the chance of this type of mistake is to require customers to endorse the check as a deposit only and include an account number.
Hopefully banks will improve security with remote deposit capture without sacrificing usability. According to the article “some say mobile deposit is more secure than branch deposits.” If that’s the case, we should eventually see larger deposit limits and fewer restrictions.
I have tried about five different remote deposit apps and find they can be useful, but each one has its own limitations. Ally is the worst I think. They take the longest to show your deposit in your account activity and there is no way to check the status until the item posts. Chase, BofA and Capital One 360 seem to be decent.
I did have trouble one time with Chase. For some reason their system wouldn't accept the check (which was actually a Chase check). I ended up putting it into Bank of America and it worked. My suggestion when endorsing items is to sign it and put "For Deposit Only" on the back but don't write an account number on it. That way if it fails with one bank you can try another easily.
The largest item I have ever done was $300. This is useful for small items, but for anything large I would go to a branch or ATM to make the deposit. Both Chase and BofA have ATMs which can scan the check on the spot just like a teller would do. I have deposited very large items at the ATM with no problem. I actually did a $100,000 cashiers check from closing a CD at the ATM. They put a hold on the funds for about 5 days, but the transaction went through with no problem.
The biggest issue with remote deposit is the funds are not available as quickly as using a teller or ATM. In most cases this isn't a problem, but like I said, I would not use it for a large dollar transaction. It's not that inconvenient to go to the branch.
My credit union puts a $25k limit on a single mobile deposit (This limit applies to me...It's not necessarily the norm). But I can get the limit temporariliy raised with a quick phone call (have done so many times). Also, 50% of any mobile deposit is immediatedly available (100% for any deposit up to $10k). The remainder is free in 2 or 3 days.
I did a fairly large mobile deposit once ($150k, on a Monday morning). $75k was immediatedly available. On Wednesday morning, the other $75k was clear.
lol @ a five-day hold on an entire deposit.