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.