Duplicate deposit danger

Mobile deposits mean customers should check bank statements carefully


SARASOTA, Fla. – It all started with a phone call telling credit expert, Gerri Detweiler of Sarasota, Florida,  a check she wrote to a charity was cashed twice.

Detweiler explained, "My first reaction was, 'How did this happen?' 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.

There are other ways a double deposit can happen, too.

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

But Feddis says a "double deposit" 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 bank will catch it, and the check writer never knows anything about it," she explained.

If your bank doesn't catch a "double debit," Feddis says it will refund your money and any fees.  Experts say 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 
  • Logging on every day to check for errors

"Look at your balances, 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," said Betsy Didan, a banking and check processing expert.

And if you mistakenly double deposit a check, experts say generally, you will not get into trouble, if it's an honest error.  But Didan adds many banks do observe your digital deposit habits.

"They will be watching very carefully on the back end," she explained. "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 do 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 so they'd have difficultly opening up a checking account elsewhere," said Feddis.

In 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," she said.

To help prevent you from 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, like a small mark or paper tear, so you can tell you've already deposited it.  Meantime, banks are also working on creating a digital check clearinghouse database to help them detect double deposits.