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#2210026 - 04/01/19 08:03 PM Mobile Deposits - Duplicate Presentments
52OPS Offline
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Where can I locate the regulation and verbiage that states who's liable when a customer uses a banks mobile deposit app to deposit a check and then takes the same check and cashes it at a check cashing business.

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Deposits and Payments
#2210033 - 04/01/19 08:30 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
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229.34(f) I believe...
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#2210034 - 04/01/19 08:37 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
BrianC Online
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It depends on whether or not the bank that accepted the mobile deposit required the restrictive endorsement "For mobile deposit only _____ Bank"

See Reg CC 229.34(f) for a discussion on remote deposit capture presentment warranties.
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#2210281 - 04/03/19 06:03 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
madukes Offline
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if the check is properly endorsed "for mobile deposit only" and the banking physically taking the check still accepts it, then they are on the hook for it.

if the check does not state it was mobily deposited, then the bank that took the mobile deposit is on the hook.

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#2210292 - 04/03/19 07:27 PM Re: Mobile Deposits - Duplicate Presentments madukes
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Say that a customer deposits their check via a Bank Mobile Deposit App (Bank A) and the substitute check is presented for payment at the Makers bank (Bank B).

The customer than takes the Original check to a Check Cashing firm and they cash it because it doesn't read "for Mobile Deposit Only" and deposits the check at their Bank (Bank C).

The Maker's Bank (Bank B) returns the second check as a duplicate presentment to Bank C.

Bank A would be liable; however, which bank is responsible to go after Bank A to collect? Is it Bank C (who was presented with the duplicate presentment return) or is the Maker's bank (Bank B) responsible to go after the Mobile Deposit Bank (Bank A) for the duplicate presentment.

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#2210295 - 04/03/19 07:44 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
John Burnett Offline
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The substitute check was paid first. The original check was presented later, so it was returned. to Bank C, which charges the check back to the check cashing firm. The check cashing firm doesn't have an indemnity claim against Bank A, and Bank C doesn't have one, either, because it sustains no loss if it charges it back to its depositor (the check cashing firm). The check cashing firm's only recourse is to go after the check payee who cashed the check with them.

Bank A provided the indemnity under 229.34(f), but there is no one who can claim it.
Last edited by John Burnett; 04/03/19 08:22 PM. Reason: correcting word choices
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#2210296 - 04/03/19 07:54 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
John Burnett Offline
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That's how the indemnity provision works. But if the substitute check that was presented and paid first was received from the Fed, I believe the Fed's adjustments process would allow the paying bank (Bank B) to return under a PAID claim either that check or the second presentment item. But if Bank B catches the duplicate presentment in time to return it within its midnight deadline, that's the path of least resistance (because it's more hassle-free) and that's what will happen.

But if Bank B didn't catch the double payment until later, it might decide to use the Fed adjustment process to return the substitute check that was first presented, in which case, Bank A would take the hit, and hopefully charge it back to its customer (who just happens to be the culprit).
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#2210311 - 04/03/19 09:37 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
Tanders922 Offline
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Slightly different question, but related..

We received a collection notice from another institution on checks that were deposited via mobile back in Aug and Oct saying they feel they are altered. Is there a time frame around how long to request collections on items this old?

Thanks!

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#2210313 - 04/04/19 12:30 AM Re: Mobile Deposits - Duplicate Presentments 52OPS
BrianC Online
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Statute of limitations varies based on the Uniform Commercial Code of your state. In Illinois the maker of a check has one year from the posting date to report an alteration and their bank to submit a breach of presentment warranty claim against the bank of first deposit.
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#2210316 - 04/04/19 12:21 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
Tanders922 Offline
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I kept looking at the Fed Regs and couldn't find anything. Thanks!

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#2216154 - 06/20/19 05:52 PM Re: Mobile Deposits - Duplicate Presentments 52OPS
madukes Offline
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question regarding this - has anyone had to file a WIC claim through the fed for their customer (depositor of the original item?). Our customer, a check cashing agency, cashed an original check that was later returned as "refer to maker" and not "duplicate. They are insisting we "get their money back for them" because the check was remotely deposited first (not evidenced by the item itself or our return reason. They claim they went to the bank that took the check first and that bank wants something from us in writing... Not sure what route to follow - has anyone handled one of these yet?

thanks!!!!

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