One fraud prevention method in RDC is to set limits on deposits.  I would like to know what approach others have taken, such as limiting the value of a single deposited item, a single deposit, or a single day's total deposits for a merchant (the limits available through our processor).  Do you tailor the approach to the specific circumstances of the merchant?  Any feedback would be appreciated.

All of the approaches you have mentioned are good to use or at least look at for risk mitigation. I would feel the first step to follow is the KYC (Know your customer) procedures of the FI to determine what should be the controls for that customer. If you set limits then they would need to be monitored to make sure they reflect the amounts or number of items being deposited via daily or weekly reporting. A useful report would be one that tells you when a merchant or customer is approaching the limits set so that you can review the behaviour and patterns and proactively manage the account and look for anomalies etc.

Steve,

This is a snippet from another conversation that touches on this subject as well. I am copy/pasting from that conversation as you may find it relevant:

Great question. A strong RDC product will offer their FI client a suite of transaction monitoring tools that include the following points of consideration: 

1) Optional OFAC scans of Payor Fields (OCR) 
2) Optional OFAC scan of Payor Fields (Manual Key Entry) 
3) Single Item Amount Threshold 
4) Single Item Amount Threshold per Client 
5) Batch Amount Threshold 
6) Batch Amount Threshold per Client 
7) File Level Amount Threshold 
8) Configurable Date Range Based Amount Thresholds 
9) Client Level, Percentage-Based Velocity Thresholds 
10) ACH to C21 Percentage Ratios (Total ACH (ARC, BOC, POP, TEL, PPD, CCD etc.)) 

11) Return Percentages to Deposit Type 
12) MICR Based Return Percentages (Monitor items by MICR when payor has previously returned items for NSF etc.) 
13) C21 to Outgoing Wire Monitoring (for those providers who offer integrated wires) 
14) ACH to Outgoing Wire Monitoring (" " ") 
15) ACH Debit/Credit Ratios 
16) Statistical Outliers from Date Range Based Mean, Median, IQR etc. 
17) Optional Real-Time Screen Against NCN Databases 
18) New Account Deposit Velocity 
19) Automated Reports for All of the above, based upon items that have been OCR repaired by the client/user with full item-level history tracking. 
20) Others 

Each of these risk management, percentage and amount thresholds, should also allow for a real-time work-flow management system placing questionable items/batches/files in a Queue with a corresponding real-time email/internal notification system for escalation approvals. The queues should be real-time and allow for distributed approvals from users/groups with appropriate privilege levels. 

These are just a few. Yes, I have seen these in usage. 

Hope this helps! 

Ron Osborne