If You Deposit Checks Through a Mobile App, Start Adding This Phrase

You may have recently gotten a message from your bank that, yes, you should read and act upon.

The message being sent by many banks involves a small, but crucial change affecting check deposits made using bank mobile apps on smartphones and other devices.

Depositors must now include the phrase “For Mobile Deposit Only” underneath their signature on all checks deposited using mobile apps. Some banks are also suggesting you add "For Mobile Deposit Only at (Bank Name)" or "For (BANK NAME) Mobile Deposit Only."

This new endorsement requirement, instituted by the Federal Reserve, officially went into effect July 1. It applies to all mobile deposits at all financial institutions, such as PNC BankCapital Oneand Legend Bankin Texas.

Without the inclusion of the new phrase, banks say the check may be returned with the notification that your “deposit was rejected due to restrictive endorsement."

The change is meant to protect banks from fraud, which can occur when a check is accidentally, or intentionally, presented at a bank after it already has been deposited via mobile. 

"It’s not like there was rampant fraud, but it was just an area they wanted to tighten up," said Michael Diamond, senior vice president of payments at Mitek Systems, which has digital transaction technology used by more than 6,100 banks.

"This is the banks taking care of themselves," Diamond said. "The channel is very, very, very safe, and the growth is great. More and more people are using it." 

Case in point: Bank of America CEO Brian Moynihan said last month that during the April to June period, more customers deposited checks using the bank’s mobile app than in person at bank branches. Overall, 76% of all deposits come through ATMs and mobile deposits, he said.

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