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What You Need to Know About Mobile Deposits


What You Need to Know About Mobile Deposits

Mobile deposits offer you the opportunity to deposit paychecks, personal checks and in some cases even money orders, without budging from your couch. You let your fingers do the walking instead of making a trip to the bank.

Convenience can come with a price tag. Mobile deposits are not risk free and not as simple as you might think.

Edgar Dworsky, founder of Consumer World tells his tale. The small Massachusetts bank he uses offered a free mobile banking app a few weeks ago. He had six checks to deposit. He installed the Android app and starting to make the deposit. "I thought after I set up the basic app with my account information and other details it would be fairly easy to make a deposit, NOT," says Dworsky.

Instead, he signed on and chose, "deposit checks." He was asked for the amount of the first check, the account to place it in and the email address the receipt should be sent to. He filled in the fields. "I was a bit resentful that either the system didn’t already know my email address, or that I would have to fill out those three things five more times for each of the other checks. Was I in essence going to have to make six separate deposits? I never got that far in the procedure to know if the app would even ask for additional checks to be included in the same deposit. I would hope it would, but somehow doubt that it would."

Dworsky photographed the front of the first check. He says the app did not engage the focus of the camera until he touched the camera picture taking button (a change he says from how regular photographs are first focused automatically, then you click).

He turned the check over to photograph the back. "I touched the camera button to take its picture, but nothing happened. I touched it several more times to no avail. Then the screen went black," says Dworsky. Then just the bank logo came up with a spinning wheel indicating that it was doing something or waiting. That never went away. Dworsky says he switched to his phone’s home screen and then back to the app. It was a black screen only, and all operating lights on the phone went out. "The app crashed and could not be restarted without turning off the phone and rebooting it."

some banks require excessive hold times that are longer than federal check clearing requirements

When he turned the phone back on and re-opened the app, it said that his transaction had not gone through. "I chose not to continue. I removed the app from my phone. The bank executive I wrote to about my experience said that future versions of the software would be improved to accept multiple checks in one transaction/deposit."

What’s the morale of Dworsky’s story? "Test the software that your bank is offering. See if it works and if it’s easy to use. If not, uninstall it and move on with your life until an improved version comes out.)

Quick doesn’t mean simple

Mobile deposits aren’t so simple, and if you’re not careful, not so safe as well. There have been news accounts of fraud and abuse. Scam artists can deposit a check into multiple accounts.

"There are risks. If you lose the original check, even if it is no good after deposit, valuable private information can be revealed if it falls into the wrong hands," says Michelle Dosher, managing editor of the Home & Family Finance Resource Center at the Credit Union National Association.

Another risk is data and identity theft in public places. Dosher says crooks can use public wi-fi networks and spying devices to leach customers’ financial information as they enter it into their phone.

If you’re keen on taking advantage of relatively new technology, the experts offer a few words of advice.

Take a good picture. "If a check is scanned or photographed with poor image quality of either your signature of the check itself, the deposit may not go through," warns David Bakke, a financial columnist with MoneyCrashers.com, "Be sure your mobile device has a high quality camera. Take the time to create clear images of your check and signature."

Know your bank’s hold policy. "Remote capture may not provide access to funds as quickly as making a deposit with a teller. Always check your bank’s funds availability policy for mobile deposits. warns Tom Feltner, a banking expert with the Consumers Federation of America. Being aware of the hold policy will also help prevent you from bouncing checks.

While some banks will clear the check in the same way they do for checks deposited at ATMs, they might hold it longer, particularly if the deposit is being made to a prepaid card, says Lauren Saunders, associate director of the National Consumer Law Center.

The reality is, "some banks require excessive hold times that are longer than federal check clearing requirements. Federal rules were written before the advent of mobile smartphones and mobile deposits, so they don’t pertain to mobile payments," says Linda Sherry, a spokesperson for Consumer Action.

Hang onto your checks for a while. Sherry also suggests saving the check for 90 days until you are sure it has cleared. "Keep the checks you deposited in a special envelope in a safe, secure place. If the check is rejected, you can take it to the bank or use an ATM to deposit it."

Avoid rejection. Make sure that the instrument you are trying to cash is accepted. While some banks and prepaid card providers are able to cash money orders, others are not. There also could also be limitations on daily deposit amounts. Find out all the rules.

Although mobile deposit is one of the most popular banking apps, that’s not to say you should blindly follow the masses. The rewards are obvious, the risks less so. Ask questions so you get the most out of technology.

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Comments
Anonymous
Anonymous   |     |   Comment #1
Checks in 2014 are anachronisms in process of becoming even more outdated.  Anyone dealing with enough paper checks to require the services of an "app" is living in the past and needs to slingshot him or herself into the twenty-first century.

Still monkeying around with checks? Get with the times.  You are ridiculous.  But I do know of a thrift store where you can find a number of cartridges for your 8-track player.  ;-)
frank
frank (anonymous)   |     |   Comment #7
I like paper checks
Anonymous
Anonymous   |     |   Comment #8
Actually, now that many of my banks have mobile deposit, I've found that using paper checks and the apps are a FASTER way of moving money between accounts than the slow ACH transfer. When I write a check from one of my accounts and scan it into the other account, it shows up immediately, and all the funds are available immediately. (I realize this YMMV with your bank, but that's how it works at mine). Versus an ACH transfer where I have to schedule it at least 2 days in advance. 

In other news I've been able to get rid of my Ally Bank account since I no longer need an "ACH hub".

Far from being anachronisms, mobile banking is making checks more useful than they were before.
msf
msf   |     |   Comment #9
As you note, YMMV.  I've two banks where I get immediate access to my ACH transfer (and one where I do not).

Write a check?  You mean I have to find my checkbook, find a pen, download an application, take a picture and enter the same data?  And what happens when I run out of checks?

(These days, I write so few checks that I figure I've got a lifetime supply.  That would change if I started writing checks to myself.)

If it works for you, great.  I'm just not used to setting pen to paper these days.  Though there's something to be said for the feel of a fine fountain pen :-)
Anonymous
Anonymous   |     |   Comment #3
Most important piece of advice in article: hold onto your checks after you deposit them. Your bank might tell you "Destroy the check" or something to that effect after it acknowledges your deposit. But would it surprise you if something went wrong down the road? Put the mobile deposit checks in a drawer for a while. Once they clear for real, 86 'em.
Anonymous
Anonymous   |     |   Comment #4
I deposit my checks at the ATM.  When my daughter had her communion last year I had 15 checks.  Went to the ATM put in my card and code and put the checks where they are taken into the machine.  The ATM takes the stack one at a time.  You can also get a receipt with a copy of each check deposited. No lines or deposit slips to fill out. I have been in a bank once in the last 4 years for a cashiers check.  I deal with less checks but still receive some and write some.
Anonymous
Anonymous   |     |   Comment #5
I didn't need a deposit app either - until I was on crutches. After opening a heavy bank door w/one hand, then watching my ankle swell as I stood in a slow line, then getting grief from the teller about a personal check (from my mother!), I switched banks. Even if I never need another online deposit again, it's nice to have the option.
OAG
OAG (anonymous)   |     |   Comment #6
My Credit Union works fine with mobile deposits. Worked the first time out and I did not have to install any type of app on my computer. Deposits are acknowledged and show up in on line banking almost instantaneously. Must be a CU thing.
#10 - This comment has been removed for violating our comment policy.