Our RDC contracts inform customers that they must deposit checks payable to the business. The contract does touch on all the other points as well. My question has to do what types of restrictions others place on RDC usage. We have customers who deposit checks payable to the business but drawn off their accounts at other banks, some checks are drawn off their other business (different business) at another bank and some from the personal accounts of the owners and payable to the business. For a while the customer was kiting. She received a warning and quit the suspicious activity. Now I think she is simply being more sneaky about it. For example check deposit check payable to business drawn from owner's personal account at another bank. Couple days later, write check to other business, but deposit at ATM at another bank. Seems like the deposits should have to do with receipts from sales that day but that isn't always the case. I know exam procedures on RDC recently were added to the IT exam manual. Haven't had a chance to read through yet. But I would think this poses a risk to the bank. there are other concerns as well, such as the condition of the loans. I would think terminating the RDC is in order.

I would consider terminating RDC. You should read the contract that you've signed with the customer to make sure you are following whatever you've agreed on when it comes to terminating the service. You should also consider placing holds on the deposits.

Any other thoughts please? I'd like to know what type of restrictions others place on the types of deposits processed through RDC.

We monitor deposits for just this type of activity. If we see it happening, we take away the RDC privilege and/or close the account. We have the same restrictions through RDC as we would have at the teller line. They are just 'replacing' the teller.