A Selfie for Your Checks? What You Should Know about Remote Deposit Capture

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Tuesday, March 11th, 2014

by guest blogger Caitlin Watkins 

Too busy to go to the bank? Hate waiting in lines? I sure do. That’s why I tried Mobile Remote Deposit Capture (mRDC), which is basically like taking a selfie of all of your checks to be deposited straight to your bank account or prepaid card.  Awesome, right? Even the Federal Reserve states that this innovation in banking technology is the biggest boom in the financial industry in years. It is convenient, quick, and cost-effective because it saves time and money on transportation.

How It Works

If you have a smartphone or tablet with internet connectivity, you can deposit checks by visiting the website or app of your specific bank and signing in. By following the directions, you can use the camera capability to capture an image of the front and back of your check. The scanned check is then sent to your bank through an encrypted internet connection and deposited into your account or onto your prepaid card.

If your bank offers mRDC, you’ll have to use the bank’s mobile app to selfie your checks. If you have a prepaid card, it might be a little more complicated. Some prepaid cards, such as Bluebird, include mRDC as part of their mobile apps. Other prepaid cards offer mRDC through a third party’s app, such as Ingomoney.

Most banks and card companies offer the Remote Deposit Capture service free of charge. Though if you want your money sooner, you may have to pay a fee. Funds from checks deposited to a prepaid card via Ingomoney, for example, can be accessed right away for a fee. Ingo’s fee is probably less than you’d pay at a check casher, but if you can wait ten days to get your money, it’s free.

The Drawbacks

Some people like to have a personal relationship with their bank, so the mRDC does not necessarily make sense for them. Others do not have a smartphone or tablet, so they are unable to utilize the service. Some banks and prepaid card companies may limit the types of checks and the amounts that can be deposited via mRDC. Also, hold times can be a bummer. Just like with depositing a check at a bank, you’ll have to wait for your funds to clear before you can access them. With banks, this can be a few days, with prepaid cards, up to 6 business days, and with Ingomoney, up to ten days if you are depositing funds fee-free.

Every vendor has their own terms and conditions, so it is important to educate yourself about the agreement you are signing before accepting it.  If you hear about mRDC from a friend who is raving about the service at her bank, be cautious about the stated liability in the terms and conditions at your own bank: they will most likely be different.

What about Security?

Although there is risk for fraudulent activity, there haven’t been too many cases yet because the technology is relatively new, according to this Krebs on Security piece. Otherwise, this method of depositing checks is relatively secure, especially if you take the following precautions:

  • Before signing on to the RDC service, make sure to carefully read the fine print to understand who takes responsibility for fraud and losses.

  • Verify how long you have to wait before you get your money so you can plan accordingly.

  • Before taking a picture of the check, endorse the check by signing the on the back next to the X.

  • Take a clear and properly lit picture of the entire check to avoid complications with the bank.

  • Keep your paper checks until you are certain they have been deposited and cleared.

  • Verify that your checks have been deposited into your bank account before destroying.

What do you think of Remote Deposit Capture? Share your thoughts in the comments section below.

 

2 responses to “A Selfie for Your Checks? What You Should Know about Remote Deposit Capture”

  1. Christina Tetreault says:

    Hi Liz. I’m so sorry that happened. Please contact a legal aid or consumer affairs office near you. Thank you for taking the time to comment. Christina

  2. Liz says:

    Two checks (not from a Bank of America account) that had been deposited using a smartphone into our Bank of America accounts were stolen from our home. Someone added a name to “Pay to the Order of” and endorsed them, then cashed one successfully at a Bank of America ATM. The other one appears not to have succeeded. We have a photo of the former at the ATM, we’re attempting to get a photo of the latter, and a police investigation is ongoing. Nevertheless, Bank of America has withdrawn the funds from our account because the check hadn’t been destroyed. The policy says that if an item is deposited more than once, “at our discretion” they can charge my account. Even in the case of robbery.

    Any suggestions for pursuing this with B of A or other consumer protection entity?

    Thank you.

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