Remote Deposit Capture (RDC) has revolutionized check processing, offering speed and convenience while reducing the need for trips to the branch.
But with that convenience comes exposure. Without the proper barriers, RDC can open the door to serious financial and compliance risks.
That's why adopting clear, enforceable remote deposit capture best practices is essential.
In this article, we'll explore the best practices that make RDC secure, compliant, and built to last.
What is Remote Deposit Capture?
Remote Deposit Capture (RDC) is a technology that enables users to scan checks and send the images electronically to their bank for deposit.
RDC eliminates the need for physical visits to a branch, allowing businesses and individuals to deposit funds from their office, home, or even on the go via a mobile device.
RDC has become essential for organizations seeking greater efficiency, flexibility, and improved cash management.
The benefits of RDC include:
- Faster access to funds
- Lower transportation and courier costs
- Extended deposit windows
- Enhanced recordkeeping and reporting
However, with these advantages come new responsibilities – particularly in terms of security.
In 2024, 65% of financial institutions reported experiencing check fraud through Remote Deposit Capture, and 80% of organizations faced attempted fraud via mobile deposits.
A 2025 AFP survey also found that 63% of companies experienced check fraud during 2024, highlighting the growing risks associated with remote deposit channels.
The numbers make the case: check fraud is rising even as check usage declines.
Key risk factors in Remote Deposit Capture
Before implementing controls, it's essential to understand the primary risks associated with Remote Deposit Capture. Fraud tactics are constantly evolving, so banks must remain vigilant and adapt accordingly.
Common RDC fraud types:
- Duplicate presentment: Depositing the same check twice, either at different banks or at different times.
- Counterfeit checks: Fake checks created using real account numbers. FinCEN reports that fraudsters use 26% of stolen checks as templates to create counterfeit checks.
- Altered or washed checks: Criminals chemically remove ink from a valid check and rewrite it with new information. FinCEN reported that 44% of stolen checks were altered and then deposited.
These frauds exploit the fact that RDC deposits are often reviewed by automated systems or back-office staff rather than by tellers, who might spot suspicious signs, such as a fake signature or poor-quality paper.
Emerging fraud trends:
- The next generation of RDC fraudsters uses AI to forge checks and employ social engineering tactics to deceive their targets. Experts project that generative AI will drive U.S. fraud losses up from $12.3 billion in 2023 to $40 billion by 2027.
- New account fraud: Using synthetic identities or stolen IDs to open accounts and quickly deposit fraudulent checks via RDC or online channels. Synthetic identity fraud now accounts for approximately 85% of all identity fraud cases in the United States.
- Mail theft: Stolen mail provides fraudsters with valid check stock to copy and exploit.
A key theme in these scams is avoiding detection. FinCEN reports that criminals prefer RDC and ATM deposits because no one physically handles the checks at the bank.
Other important risks:
- Insider or customer errors: Mistakes such as missing endorsements, mixing up check images, or duplicate deposits can result in losses.
- Security risks: Unsecured home offices may expose scanned checks to hackers.
- Technical issues: Poor image quality or incorrect MICR data can render deposits invalid.
- Regulatory compliance: Banks must follow laws like Check 21 and Regulation CC, ensuring they don't release funds too early and properly handle returns. Noncompliance can result in penalties.
9 Essential Remote Deposit Capture best practices for secure check handling
The following practices address key vulnerabilities to keep RDC secure, efficient, and compliant:
1. Verify customers and accounts before enabling RDC
Proper identity and risk screening is the first and most crucial step in preventing RDC fraud.
Banks should confirm each customer's identity, creditworthiness, and deposit behavior before granting RDC access. Periodic reviews help catch anomalies over time.
What to do:
- Use KYC and risk-based due diligence (references, credit history checks).
- Deny or restrict RDC access for customers with poor or unclear backgrounds.
- Audit existing RDC users' activity regularly (e.g., annual reviews).
- Draft clear RDC service agreements outlining customer responsibilities (endorsement rules, retention periods) and bank protections (holds, indemnities).
Why it matters:
Screening filters out risky customers upfront, reducing exposure. Clear contracts align expectations and liability.
2. Require restrictive check endorsements and secure handling
Restrictive endorsements, such as "For Remote Deposit Only," prevent redeposit and reduce the risk of fraud.
Physical checks must be securely stored immediately after imaging with controlled, dual-person handling.
What to do:
- Mandate endorsement stamps (e.g., "For mobile deposit only to [Bank]").
- Implement dual control: one employee prepares deposits, and another verifies.
- Store original checks in locked, tamper-evident safes accessible only to trained personnel.
Why it works:
Restrictive endorsements and strict handling block duplicate deposits and internal theft.
3. Retain and destroy original checks consistently
Retain paper checks only as long as needed for audit and compliance (typically 30–60 days).
Mark checks as void and securely shred them after the retention period has expired.
What to do:
- Define the retention period in policy (e.g., 30 or 60 days).
- Mark checks "VOID" before cross-cut shredding.
- Log destruction dates for regulatory compliance.
- Enforce "deposit once only" policies contractually to deter duplicates.
Why it matters:
Consistent retention and destruction prevent reuse or fraud while supporting compliance audits.
4. Leverage Real-time fraud analytics and decisioning
Real-time risk scoring, utilizing advanced image analysis and behavioral insights, prevents fraudulent deposits before funds are credited.
This proactive approach significantly reduces losses and enhances customer trust by minimizing unnecessary holds.
What to do:
- Deploy tools that analyze check images for alterations or missing security features.
- Use behavioral analytics to flag deviations from standard deposit patterns.
- Integrate real-time risk scoring directly into the deposit workflow to trigger automated holds or approvals.
Why it works:
Instant insights allow banks to act before funds settle, stopping most fraud in its tracks.
Pro tip:
Leading banks use VALID Systems' Real-Time Loss Alerts (RTLA) to flag over 75% of high-risk checks on deposit, enabling immediate intervention.
5. Harden RDC hardware and software security
RDC devices and networks are prime targets for hackers aiming to compromise sensitive financial data or inject fraudulent checks.
If you don't have strong IT security, fraud risks skyrocket, and you jeopardize regulatory compliance.
What to do:
- Keep RDC workstations and scanners fully patched and protected with antivirus and firewalls.
- Isolate RDC hardware on dedicated VLANs or networks where possible.
- Require up-to-date OS versions on mobile deposit devices.
- Enable multi-factor authentication (MFA) on online portals.
Why it works:
Strong security reduces the risk of remote account takeover and unauthorized access.
6. Train customers and staff to spot red flags
Human alertness is the frontline defense.
Well-informed customers reduce accidental errors, and trained staff can quickly identify suspicious deposits, stopping fraud before losses occur.
What to do:
- Provide clear instructions on endorsements, scanning, and deposit steps.
- Warn customers about scams like overpayments or phishing.
- Train tellers and operations staff regularly to identify irregular patterns and anomalies.
Why it matters:
Informed users prevent accidental fraud and reduce bank losses.
7. Set transaction limits and apply holds based on risk
Setting limits and holds based on customer risk helps prevent large fraudulent deposits.
It also ensures compliance with funds availability rules while maintaining a smooth customer experience.
What to do:
- Assign daily and per-check limits tailored to each customer's risk profile.
- Hold checks exceeding typical amounts or flagged by behavior models.
- Align holds with Regulation CC guidelines to remain compliant.
Why it works:
Limits and holds give banks time to verify questionable deposits before releasing funds.
8. Use continuous monitoring and fraud detection tools
Automated systems help detect duplicate deposits, unusual patterns, and suspicious behaviors that humans might miss.
What to do:
- Monitor for duplicate check numbers and image hashes across banks.
- Use consortium databases to detect cross-bank fraud.
- Flag rapid deposit spikes or out-of-pattern transactions for review.
- Integrate third-party check verification databases (e.g., government treasury checks).
Why it matters:
Real-time monitoring catches fraud early, minimizing financial losses.
Pro tip:
Consider adding VALID's INclearing Loss Alerts, which employ machine learning and behavioral analytics to detect complex fraud that may be missed in front-end screening.
9. Implement dynamic funding solutions to balance risk and speed
Innovative solutions enable banks to offer faster funds to low-risk deposits while holding risky items for review, thereby improving the customer experience without increasing fraud risk.
What to do:
- Pilot dynamic funding by customer tier (e.g., businesses vs individuals).
- Provide opt-in messaging for instant funding features.
- Back instant approvals with fraud guarantees to protect banks from charge-offs.
Why it matters:
Dynamic funding maximizes customer convenience and fee income while sharply reducing fraud exposure.
Pro tip:
Top banks use InteliFUNDS, which instantly accelerates 99% of low-risk checks (while covering any that return unpaid), and InstantFUNDS, which offers same-day funded options backed by guaranteed fraud protection.
VALID Systems' advanced RDC solutions
Implementing all these practices is easier when you have the right technology partner.
VALID Systems is at the forefront of next‑gen RDC fraud prevention, with proven products designed around these very best practices. We blend industry expertise with cutting-edge AI to build trust in every check deposit.
With over two decades of innovation in check fraud detection, VALID equips financial institutions with real-time intelligence, automated decisions, and risk-aware funding strategies. The result? Stronger fraud defenses without slowing down the customer experience.
Our main products:
Real-Time Loss Alerts (RTLA)
RTLA scans each deposit in real-time and flags high-risk checks with exceptional accuracy.
It learns patterns of fraud from a consortium of customers (over 420M accounts and $6T processed annually in VALID's network), so it "alerts you to over 75% of potential check deposit charge-offs" before they happen. Banks using RTLA have dramatically reduced fraud losses because they can intervene instantly.
InstantFUNDS©
This solution transforms check holds into customer value. InstantFUNDS approves a deposit, providing the customer with immediate access to funds (often for a small fee), and mitigates the bank's risk by covering any returned items through VALID's guarantee.
In effect, customers get the fastest availability, banks earn fee revenue, and everyone avoids post-deposit hassles. This best-in-class approach turns a traditional pain point (long holds) into a competitive offering.
InteliFUNDS©
Perhaps the most revolutionary innovation, InteliFUNDS acts like a personal decision engine for each check. It utilizes machine learning models and rules to process 99% of safe deposits instantly, identifying only the riskiest ~1% to hold.
The benefit is twofold: end-users get the seamless RDC experience they expect, and banks tighten their fraud belt with minimal inconvenience.
Ready to modernize your RDC risk strategy?
Book a consultation and let VALID Systems help you prevent losses, reduce friction, and stay ahead of fraud.