Unnexpected Risk of Smart Phone Deposits
Our mobile phones are amazing devices. They have simplified many aspects of our lives. However there are plenty of areas where they can create complications instead of solutions.
While I was examining and reconciling the bank accounts of one our clients, I discovered five checks the client had written that cleared the account twice. It turns out our client’s vendor was using a smart phone application to take a picture of the check and afterwards cashing it at a local casino. One of the times, the bank discovered it and sent a notice to the institution that had redeemed it the second time. The other four times, our client’s account was double-dipped by his vendor.
Please be aware of your bank accounts. We recommend that your bank accounts be reconciled monthly to be able to catch this type of activity. Most banks offer an online service called Positive Pay that helps detect check fraud. Banks use this to match checks the company issues with those it presents for payment. This would be the most effective control to safeguard against this double-dipping.