Mobile Deposits Surge But Require Extra Caution
The Savvy Consumer

By Teresa McUsic,

Last week my 17-year-old daughter deposited a check from her pet sitting business into her bank while at home with a click of her smartphone.

Turns out that while her parents still get in the car and drive to their local branch, she is more in the mainstream: At Chase last year, more people made digital deposits through their smartphone app and at ATMs than with a live bank teller—a first for the bank, according to a Chase spokesman.

Chase only launched its mobile deposit feature five years ago, but its enrollment has grown to 19 million customers. Deposits using the smartphone increased 25 percent over last year, to around 45 million transactions.

"Our role is to make it easier for customers by allowing them to bank on their terms.” said Donna Vieira, chief marketing officer for Chase consumer banking, in a statement.

A new report out by the Federal Reserve shows this digital trend is widespread through the consumer banking world. The report said more than half of smartphone owners with a bank account used mobile banking last year.

Banking done via phone included checking on account balances and recent transactions (94 percent); transferring money between accounts (61 percent); receiving alerts from their bank (57 percent) and finally, depositing checks (51 percent.)

Interestingly, the report goes on to say that access to their bank accounts via their phone is making us better shoppers: 63 percent checked account balances before they made a large purchase and more than half of them decided not to buy because of their account balance or credit limit.

But as with any new method of doing something, there are issues to be aware of and practices to employ.

First, Chase recommends after you have digitally deposited the check, to write the word “deposited” and the date on the face of the check. Keep the check for one week and then destroy it.

“This allows sufficient time in case the original check is required for any reason,” said Greg Hassell, spokesman in Houston for Chase.

Also, check with your bank about wait time before your deposit is available. Federal law dictates banks in general must have $200 of the deposit available the next business day, with the rest available for check writing on the second day or cash on the third day, according to Consumer Reports.

“But the regulations were written before the advent of mobile banking and don’t include it, creating a loophole big enough for certain banks to drive an armored car through,” the magazine said.

Watch for any fees to the digital banking as well, CR advises. Most don’t charge anything to digitally bank, but some charge up to 50 cents per transaction.

Using mobile devices is a lot like using a computer, so use similar practices for security— especially since your mobile device can get lost or stolen even easier than a laptop, advises the Consumer Financial Protection Bureau.

The CFPB also suggests:

• Set up alerts and check your account balances. Alerts can be sent by text message, email or app notifications and can tell you when your checking account balance is low, when your credit card balance exceeds a limit you set and when a charge over a specified amount is placed on your credit card.

• Protect your personal information. Don’t share your PIN or password and don’t save them on your mobile device.

• Use passwords. Password protecting your mobile device can help prevent access to your information in the device. Don’t use easy to identify passwords like 1234 or your birthday and never save the password on your phone.

• Report loss or theft to your financial institutions or financial services providers like credit card companies as soon as it occurs, along with your mobile provider.

• Use secure websites or apps. Don’t login to your accounts through links that are sent to you by an email address or on a website or app that you don’t recognize. When using free or public wi-fi, use a private network and go to a secure site that begins with https.

• Remove sensitive information from your old phone or device before you get rid of it. You may have left names of banks or credit unions, passwords or other clues that could help identify your personal information.

Take these steps and you can safely follow the younger generation into digital banking.

Teresa McUsic’s column appears Saturdays in the Fort Worth Star-Telegram.