Digital banking creates duplicate deposit risk

Most banks have safeguards to prevent digitally-deposited checks from being deposited in person again. (Source: MGN Online)
Most banks have safeguards to prevent digitally-deposited checks from being deposited in person again. (Source: MGN Online)

HUNTSVILLE, AL (WAFF) - It all started with a phone call telling credit expert Gerri Detweiler a check she wrote to a charity was cashed twice.

"My first reaction was 'How did this happen?' said Detweiler. "My second reaction was 'Oh no, have I bounced any checks?'"

The check was first deposited by the charity virtually by simply pointing, shooting and clicking using a remote deposit app. But the second time, an employee went to the bank and mistakenly deposited the same check, number 1027, again. No banks caught the duplicate deposit, and the account was debited twice.

"I think most people would be shocked to learn that a check that they write could be deposited twice," said Detweiler.

How else could a double deposit happen?

"It could be somebody deposits the same check by mobile into two different bank account at two different banks or that they've deposited remotely using their mobile and then go to a store or check cashier and cash it," said Nessa Feddis, Vice President of the American Bankers Association.

But a "

" that results in a "double debit" from your account is rare because banks have robust detection systems.

"Generally if there is a duplicate deposit, the check writer's back will catch it, and the check writer never knows anything about it," said Feddis.

If your bank doesn't catch a "double debit", Feddis says it will refund your money and any fees. I checked with several banks in the Valley. While most declined to comment, Wells Fargo confirmed what Feddis says.

you can help protect your account by having your bank alert you if your balance goes below a certain amount, asking what they do to detect duplicate deposits and logging on every day to check for errors.

"Look at your balances," said Betsy Didan, a banking and check processing expert. "Look at your transactions, and communicate to the bank or the credit union if you see some suspicious activity or transactions you know you didn't make."

Can you get into trouble if you mistakenly double deposit a check? Generally no, if it's an honest error. But

your digital deposit habits.

"They will be watching very carefully on the back end," said Didan. "If they have any abuse to the system, they will actually shut down the application if they feel the consumer does not handle it appropriately."

If you accidentally double deposit a check, once the bank finds out, the money from your second deposit will be deducted from your account. If you don't have enough to cover the deduction, and it appears you are knowingly committing fraud, that's when legal or other problems could start.

"If there's no money there, and the customer doesn't repay the amount, the account would be closed, and their name would go to a negative database," said Feddis. "So, they've have difficulty opening up a checking account elsewhere."

In Gerri Detweiler's case, she didn't bounce any checks, and the charity reimbursed her for the double deposit. Now, she urges people to keep a close eye on their accounts.

"I've learned a lesson here," said Detweiler.

What can you to do prevent accidentally double depositing a check?

Experts say after you make a mobile deposit, keep the actual paper check for a week or two, but create some sort of marking system on the check. You could put a small mark or paper tear so you can tell you've already deposited it.

Copyright 2014 WAFF. All rights reserved.