About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Ally Bank Starts Roll Out of eCheck Deposit for Scanning Checks at Home


Ally Bank announced from its Straight Talk blog that it has started the roll out of eCheck Deposit. According to the post, they will be rolling this out to "customers in phases throughout 2011." Here's how Ally describes the service:

All you need is a computer with an Internet connection and a scanner. Then, simply scan and submit your check images electronically. We’ll send you an e-mail when we receive and process your check image. If there’s ever a problem with your deposit, we’ll let you know so you can fix it and resend.

You'll have to wait for Ally to get the chance of trying this out. According to the post:

We’ll send an e-mail notification to customers letting them know when they will have access.

I had posted on the remote deposit capture plans of Ally and ING Direct last month. In that post, a few readers expressed concern on how banks will ensure this service isn't abused by criminals. I think this is one reason why banks like Ally and ING Direct have been taking so long to release this. According to my contact at Ally, they "spent time testing eCheck Deposit Service with employees to ensure it is safe and secure."

In the comments from my last remote deposit post, a reader described steps that Alliant Credit Union takes to ensure their eDeposit Plus service remains free of fraud. At Alliant, you have to have been a member for six months before you can qualify. At USAA Bank, it's limited to members who are eligible for USAA property and casualty insurance. This requires some military connection. I reviewed several banks and credit unions that offer remote deposit last year.

Related Pages: Ally Bank, checking account

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  |     |   Comment #1
I can't wait until ING offers theirs. Ing is fantastic for no fees...had them almost 4 years now. I just hope whomever buys them according to their court ****ed ordered sale doesn't change their structure.
  |     |   Comment #2
Oops sorry that one word was a typo.
  |     |   Comment #3
I still don't understand how remote deposit capture makes fraud easier... it's not like it's very hard with paper checks, which are very insecure.  I can print out a perfectly legit-looking check on my laser printer.  In fact, I've done it to print out checks on my own account.

How is remote deposit going to increase the chances of fraud?  I suppose it will make it slightly easier for *really lazy* fraudsters who don't actually want to go to the trouble of printing out a new check and forging a signature in ink...  Anything I'm missing here?
  |     |   Comment #4
Dan is absolutely correct. When I take checks to my Chase bank now I can deposit them one of two ways: I put them in an ATM (which scans them, like the check scanner/remote deposit) or give them to a teller (who runs them through a check scanner exactly like the one they give to businesses). The only possible additional safeguard that isn't present with remote deposit is that the teller physically handles the check for a split second before putting it into the check scanner. But even that can easily be bypassed by depositing the check directly into the ATM, where as far as I can tell it's processed with no human hands.

C'mon, Nigerian fraudsters can make real-looking fake cashiers checks easily. In other words, fraud risk is already extremely high. The remote deposit isn't significantly increasing it.
  |     |   Comment #5
Fraud comes into play because you still have the physical check after you scan it for remote deposit and could present the same check for deposit at a branch or ATM. But most banks should have their system set up to detect double presentment.
  |     |   Comment #6
Fraud occurs because the scanner is logging or looking at the bank’s routing number and the account number and then at the amount field and that is all.
Now if I change one number on the account field or make 3 to looks like 8, the money will be stollen from  someone else’s account and deposited to mine. If I do a number of other mischiefs and get the money out and  dissappear, by the time the whole fraud is exposed, I will be in south America.

For your info: Many accounts are being opened with stollen IDs, just to do the crime and it is almost impossible to re-trace the whole fraud back and even less chances to find the frauds-ter. Read FBI, FTC and other sites for such frauds, they are happening on daily bases.
  |     |   Comment #7
Alliant's stated policy is 6 months but I had access within a week or two of joining.
  |     |   Comment #8
To #6, the numbers on checks are printed with magnetic ink, you can't just change them with a pen. If you can change magnetic ink, then you can commit fraud whether there are check scanners or not.
CU Watcher
  |     |   Comment #9
Under CHECK 21, the law that makes image presentment of checks possible, the financial institution (FI) warrants that it has control of the physical check that the image has been created from. This is true when the check is deposited in an ATM or at a teller counter, but is not in the case of remote deposit capture (RDC). Therefore, the FI is taking a risk in not having the physical check.

CHECK 21 also says that in the case where an image and a physical check are presented for payment, the physical check takes precidence. So if someone submits a remote deposit at Credit Union A and then deposits the physical check at Bank B, Credit Union A would be on the hook for the amount because they cannot back up the image with a physcial check and Bank B can. It does not matter that Credit Union A submitted the image weeks before the deposit took place at Bank B, all that matters is who has the physical check.

Also, to poster #8, remote deposit caption systems perform an optical character recognition (OCR) for the routing and account numbers (MICR encoding), so fraudsters don't need to have magnetic toner if they are intent on committing fraud with RDC. OCR is why you can use any scanner or mobile device if the FI offers that service.
  |     |   Comment #10

Anonymous - #8, You are deadly wrong, #6 is correct, scanners can not see any magnetic ink and the fraud is easy to do. You can create a check in any wordprocessor and presented to a bank using a scanner and the bank will never know it until is too late.

  |     |   Comment #11
Well I think the obvious outcome of all this is that if the banks see a large uptick in fraud with Remote Deposit, they will simply kill it off. After all, the banks don't like dealing with fraud and potentially having to eat the costs or pass them on to customers through less competitive rates.

  |     |   Comment #12
"After all, the banks don't like dealing with fraud and potentially having to eat the costs or pass them on to customers through less competitive rates."

I don't know how they could get much less competitive rates than they already have right now.... unless they want to start charging ME interest for me giving them my deposited funds... :-)

  |     |   Comment #13
Anonymous - #6 is correct, if anyone knows your account number, can clean it with a scanner, how you ask, well, from the bank you can find the routing number and the balance just by calling and pretending you have a check issued to you by the holder from that account and you want to make sure the check is good for the $xxxx.xx amount, if the bank says yes, scan and deposit into your ficticious account open prior with stollen IDs and voila, the money is transfered to you, simple and easy.
  |     |   Comment #14
lol Who is going to Depsosit a Fraudlent check in their own bank account people. If they do they go to jail. It's not like they are cashing the checks remotely and can disappear. They are depositing it into their own bank account. If there is fraud. The consumer is fingered just like with the nigerian checks. The nigerian checks still get past the teller because they are real. Consumers just need to be wiser when depositing checks.

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