Is This a Major Flaw in Mobile Banking?

No time to get to the bank to deposit a check? No problem. Many banks and credit unions let customers save a trip by snapping a picture or scanning an image of the check and transmitting that to them online or on their smartphone. It’s very convenient.

But is it safe? If all it takes is an image of a check — and not the actual piece of paper — what’s to stop someone from depositing a check more than once?

That’s exactly what happened to me recently.

A couple of months ago I wrote several checks from an estate account I am administering. I wasn’t monitoring the account frequently online, as I do my own account. A recipient of one of the checks, a charity, reached out to say it had accidentally deposited the same check twice: electronically the first time and in person at a financial institution the second. The charity caught the mistake before I did and made good on it by sending a reimbursement check right away.

“Most banks catch the problem before the items post (twice) in the checking account,” says Bob Meara, senior analyst with Celent, a financial services research and consulting firm.

But the system is not perfect. In particular, the biggest risk is with someone who deposits the same check at multiple financial institutions, since there is no central database to track that, Meara warns. “There are efforts along those lines, but they are limited and they are usually used in a check-cashing type environment,” he says.

This “double depositing” doesn’t appear to be widespread, at least not yet. “They do happen but there aren’t many of them,” says David Walker, president and CEO of the Electronic Check Clearing House Organization (ECCHO), a banking trade association. “First place that those can usually be determined as duplicates is at the paying bank or by the paying customer. Most of the banks at this point have been pretty good at implementing duplicate detection software.”

Fortunately, consumers shouldn’t be on the hook if a check they write is cashed more than once. “There is no question that a consumer is not liable,” says Nessa Feddis, senior vice president at the American Bankers Association. Indeed Meara says duplicate check presentment is “more of a risk for the bank than for consumers.”

Still, in my situation, the bank never caught the error, and had the check recipient not alerted me to the problem, it may have taken me a little while and some serious head-scratching before I figured out what happened. Other checks I wrote could have bounced if there wasn’t a cushion in the account.

Check Writers Beware

Whether or not you still write checks, it’s wise to monitor your checking account carefully. Checking in daily is not overkill.

If you do spot problems, report them to your financial institution immediately. Stopping in at a local branch or calling their customer support line is fine, but also make sure you read and follow their written guidelines for reporting errors just to be on the safe side. It’s always wise to have something in writing in these situations.