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Remote Deposit Capture Discussions Discuss the ins-&-outs of Remote Deposit Capture here. No vendor solicitations here please.
Discussion Boards > Remote Deposit Capture Discussions > Utilizing Remote capture to deposit to Personal Accounts View modes: 
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Harry - 2/12/2008 1:21:26 AM
   
Utilizing Remote capture to deposit to Personal Accounts
I have an owner of a business that wants to use Remote Capture not only to deposit to the business account, but also to his personal account.  They also have a client which they currently make over-the-counter deposit for that they also wish to add to remote deposit.  Does anyone see any Risk issues assocaited with these two processes, and are you aware of any regulations that prevent Banks from doing so. 

I can see a problem with checks being deposited to incorrect accounts, and issues with Third-Party checks.  From my perspective, the issue would be that the Merchant Agreement clearly stated they are responsible for any losses as a result of using the scanners to deposit to these type relationships.  Any other Risks???

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jeyre - 2/13/2008 2:45:51 AM
   
Re: Utilizing Remote capture to deposit to Personal Accounts
We allow the business owners to use their business' remote deposit service to deposit to their personal checks, but have the business owner sign an agreement in which they agree to proper processing and security, and in which they indemnify the bank for any losses associated with their use of the service.  I'd be interested in hearing other bank's experience with allowing personal accounts to be linked to a remote deposit set-up....

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rdc1 - 2/14/2008 3:04:14 AM
   
Re: Utilizing Remote capture to deposit to Personal Accounts
If the same RDC Platform is being ued for both business and personal deposit processing, ensuring the deposits go into the correct accounts can be very important. One way to do this is to setup security monitoring thresholds for both the RDC Platform as well as a the DDA-level. For example, if the Business account normally has no more than $40,000 deposited in a single day, and the personal account normally has no more than $10,000 deposited in a single day, flagging the personal account for review when a deposit in excess of $10,001 might work well. Most RDC systems can flag aggregate deposit amounts or even individual $$ amounts for review... either by the user or by the manager, or even by the bank providing the service.

As for regulations, I am not aware of any that would prevent this from happening, but we will look into it. A legal agreement would certainly have to be in place for each account in question.

Also, ensuring the truncated checks are safely disposed of is important. -and having this in the legal agreement helps protect te bank in the event of losses the the client as a result of the checks being stolen, etc.

One final item... I believe that the FCC has only approved the majority of the sanners on the market for use at a business location. I believe, if a scanner is to be used in a home, it might be pudent to determine if the FCC has approved the device for such use. Thanks to a quick call placed to the folks at Digital Check, they were able to confirm that if the scanner is to be used in a residential location, it needs to be "FCC Class B Certified". I honestly do not know wat the risks are if the scanner is not certified as such, but at least thi information is now known.

I hope this helps-

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Harry - 2/14/2008 4:13:53 AM
   
Re: Utilizing Remote capture to deposit to Personal Accounts
In the instance below, the scanner would be set-up at the "Business" location so I assume the scanner would not need to be FCC certified.  The merchant (CEO) would be using the scanner at the business to deposit to his personal account and flagging the account at an agreed aggregate $$ limit would reduce some of the risk, in addition to the agreement indicating to the merchant full responsibility.    I'm just not sure with this being a fairly NEW, and still fully not understood product, how well any Agreement would hold up in court should losses occur.   

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rdc1 - 2/14/2008 5:05:13 AM
   
Re: Utilizing Remote capture to deposit to Personal Accounts
You're quite right regarding the "NEW" aspect of RDC. To our knowledge, no court precedent has been set on an RDC case whic went through to a court decision. We have had several descussions with several legal experts who voice the opinion that as long as 1) known risks are addressed, 2) these risks are communicated to the client, and they undersand the risks, and 3) liability for these risks are addressed and communicated in the legal agreement, service providers should be covered.

Other concerns focus upon data security - both on the data on the physcal check and the digital data captured from the items. Note that this information is of the company or individual who wrote the check to the depositor. What are the reprecussions if this data is stolen? If the payor on these items incurrs losses as a result of the stolen check or data, can they hold the depositor liable? Can they hold the depositing bank liable? I think the answer is yes, but the "How" and the "Why" are the real issues.

If I write a check to someone and somehow that check falls into the wrong hands and I incur a loss, can I hold the person I originally wrote the check t responsible? What are the obligations of the person I wrote the check to in terms of safekeeping that item? These and related questions are why the concept of data security and the obligations and responsibilities of the depositor and service provider encapsule one of my largest concerns with RDC.

Thoughts?

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