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Remote Deposit Capture

Question: 
Remote Deposit Capture poses risks to the financial institution as well as to the customer. What is the biggest risk?
Answer: 

The biggest risk is Check 21's indemnity provision, which makes the party converting the paper check (bank or business) liable for any loss that resulted directly from the check being converted. The charge-back period is one year from the date the injured party discovers the loss, and is triggered when two conditions are met. This is explained in depth in an article that was reviewed by the Federal Reserve Board.

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First published on 10/09/2006

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