Well, aside from the basic concept that the bank just basically needs a scanned image to extract the check’s account etc. from… per the Check 21 act.
How do the banks prevent things from being processed twice? Does that go unnoticed until it hits the issuer’s bank? (my guess). Or are there clearinghouses that do some error-checking?
Do banks generally set up red flags if an account gets two checks with the same check number? (the issuing banks, not the payees’ banks).
What if there’s a dispute over the amount?
My credit union just added this feature, and I tried it out the other evening on a small check I’d had sitting around; that hasn’t yet been credited but they did say it could take several business days.
Credit Union IT guy who has been implementing this checking in! The key is that for 99% of transactions, the method is exactly the same as before, except that a computer reads the check instead of human (but is putting the exact same info in a database) and then an image of the check is retained rather than the physical copy. As long as you have a good image, you’re golden. To answer your specific questions:
Check 21 software is designed to look for duplicates in check number/account number/routing number. The combination of those three numbers should be unique, and you’ll get an error during the transaction if that unique combination has gone through already. If they went through more or less simultaneously at different locations? The timestamp would be the tiebreaker, and the second item would be rejected and reversed. As you say, this could take a little time, although not much. Checks are typically processed within a couple of hours.
Yes. These flags were in place long before remote deposit.
Same as before, have a human look at the check and figure it out. It’s usually not a problem. Note that the Check 21 protocol is capable of reading human handwriting to a degree, and matching up the written amount with the numerical amount. Theoretically, at the point of the transaction, a human needs to intervene if the two do not match.
Several business days? That seems off. Check processing should go far, far faster than before.
It may well have hit the sender’s account already. The CU’s website says “It takes about two business days before you’ll see the deposit in your account.”. I did the deposit about 48 hours ago; as of 3 hours ago it wasn’t there, but I just logged in and saw that it now appears.
You mentioned the Check21 software matching account/routing etc. - if I were to try to deposit the same check twice at one bank, would my bank do the catching? I have to guess that there’s a check at the issuer’s end as well, in case someone tried depositing the same check at two different banks.
(Note: no, I am not planning on attempting any fraud! Just curious about how the various error-prevention methods kick in).