Fraud from mobile banking deposits

Written by Shelley Ricketts on Jan. 23, 2015

Technology is constantly evolving and many commercial banks are using the latest technology advances. Some of these include mobile banking, electronic payments and mobile cheque deposits or Mobile Remote Deposit Capture (MRDC).

We have all seen the commercials showing us how easy it is to deposit a cheque by taking a picture of it with a cell phone.  What we haven’t seen is the potential fraud risk that we are exposed to. The imaging systems currently used by some banks are not necessarily providing enough data to identify and detect fraudulent activity.

Recently a client of ours became a victim of this type of fraud, where cheques were being deposited into an account at one bank using a cell phone and then physically being deposited into a different account at another bank.  As the cheques did not always clear the bank on the same day or in some cases the same month (one cheque would clear September 30 and the next one would clear October 1), the fraudulent activity was only discovered when the client brought his records in for his quarterly bookkeeping.

The bank didn’t catch the duplicate images that were being deposited over four months and wouldn’t have had we not brought it to our clients’ attention.   Here is the related article that made the front page of the Edmonton Journal.

So the technology is here to make life more convenient…but it’s not robust enough to fully protect us just yet.  Many people use web banking on a regular basis and might catch this type of activity before waiting for the bank statement to arrive in the mail.   However, there are also many others who don’t necessarily reconcile and review all of their bank statements in great detail. If that is the case, then you are at risk.

Here are a few ways that you can help to protect yourself from this type of fraud:

-          Review and reconcile your bank statements on a regular (monthly) basis

-          Most banking statements include images for all cheques that have cleared during the statement period.  Images for cheques cashed by mobile phone are usually smaller than the other cheque images.

-          Talk to your financial institution about what their fraud protection policies are and what you as a customer are required to do if this happens to you

For more detailed information please call KWB at 780-466-6204 or email us by clicking here.

Thanks to Shelley Ricketts of KWB Chartered Accountants for providing this content.

Shelley Ricketts

Shelley Ricketts

Accountant

Shelley joined KWB in January 2011 as a part-time accounting technician subcontractor. Prior to joining KWB, she worked in a similar role with a smaller accounting firm for over twelve years but was looking for a change and KWB delivered the work environment and flexibility that she was looking for.

Along with many years of public accounting experience, Shelley brings an extensive bookkeeping background to KWB and is a Certified QuickBooks ProAdvisor. In addition to working on corporate files, she also provides remote and on-site client training and assistance in both Quickbooks and Simply Accounting.

Shelley lives outside of Sherwood Park on an acreage with her husband and two boys, three horses and two dogs. Away from work and the acreage, she enjoys camping trips with the family and afternoon trail rides with friends.

Shelley's Contact Information

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