Statistical Look at Mobile Deposit Duplicates and Losses

Allowing customers to deposit checks by taking a photo with a smartphone or tablet (mobile deposit) opened a new avenue for fraud. Unlike depositing a check at the ATM or at the teller line, the consumer keeps the physical check after depositing it via a mobile device. The customer could try to negotiate the deposited check a second time, on purpose or by accident. To mitigate loss exposure from duplicates, financial institutions apply holds on checks and set limits on mobile deposit capture usage.

According to remotedepositcapture.com’s Second Annual mRDC Industry Study, despite original fears to the contrary, Mobile Deposit is a “homerun”. An overwhelming majority of FIs participating in this year’s survey (76%) had not experienced any losses from mRDC. Of those FIs that reported losses, 47% said the amounts were so small that they did not require changes in policies or procedures.

However, while fraud losses have been low, financial institutions have higher costs in other areas due to duplicates caused by mobile deposit. These costs fall into the following areas:

  • New technology to identify and prevent checks from paying against their customers’ account more than once
  • Additional operational resources to research and adjust duplicates
  • Write off of non-fraud adjustments