Mobile Deposits Creating New Fraud Concerns for Banks
As mobile banking becomes more prevalent, new concerns have emerged for banks that accept check deposits through smartphones. These financial institutions are looking for ways to prevent consumers from depositing or cashing checks at more than one bank.
While the “double-dipping” of mobile deposits has not yet become a serious fraud problem, some banks are seeing customers deposit one check with multiple institutions via their smartphones, either on purpose or by accident. This is easy to do with the current setup for mobile deposits because consumers can just take a picture of a check and make a deposit instantly. The banks are left to sort out which institution actually receives the money.
To combat this, some banks have started to put holds on checks deposited through mobile phones until the funds clear the issuing bank. Others have put limits on the value of a check that can be deposited through a phone. Some banks only allow customers with longstanding relationships to deposit checks with their phones.
Each of these current solutions puts an inconvenience on the customer. The whole purpose of mobile deposits is to streamline the process, not make it take longer. Banks must find ways to protect themselves without putting consumers on the backburner.