The major threat everyone seems to be honing in on is the chance for multiple deposits at different financial institutions or check cashing locations, of the same paper item.
An easy example of this would be an individual uses his smart phone to execute a Mobile Remote Deposit of a check for $100 into a bank account. That individual then goes to a check cashing (or another financial institution) and cashes that same check for $100.
The next day when the funds become available in their account at the financial institution where the Mobile Remote Deposit was executed. The individual now has used the same check for $100 to claim $200 from it.
The overall result of this is the original individual is paid twice for the same check, someone or multiple someone’s have been defrauded and lost their money. As well as the financial institution that originally deposited the item is left open to legal actions and losses, as they did not provide any endorsement of any kind against the original item being presented again at another location.
Discussions recently have led into a resolution that could be the answer to this potential threat against duplicate deposits of the same item via Mobile Remote Deposit.
The original depositor will be required to place an accurate and restrictive endorsement on the back of the check being deposited via Mobile Remote Deposit. The endorsement would need to include the following to be eligible for deposit.
·
For Deposit Only to Account# 123456789
·
Financial Institutions Name
·
Payee Name (customer name printed)
·
Deposit Date
Financial Institutions requiring this type of physical
endorsement for an item to be eligible for Mobile Remote Deposit would greatly
decrease the chance of the same item being:
·
Cashed at a check cashing location – The physical
endorsement would be seen
·
Deposited at a second financial institution –
The endorsement account# would not be theirs
Of course, enforcing a physical endorsement for a check to
be deposited via Mobile Remote Deposit is not the be-all-end-all solution to
this threat of fraud.
However, I do believe that implementing some sort of physical endorsement will better restrict those individuals who are trying to commit fraud against financial institutions or other individuals.
However, I do believe that implementing some sort of physical endorsement will better restrict those individuals who are trying to commit fraud against financial institutions or other individuals.
