Remote Deposit Capture (RDC) has revolutionized banking convenience, allowing customers to deposit checks using their smartphone or scanner and access funds in just one to two business days. But RDC is not without challenges.
The primary concern is remote deposit capture risk – fraud and operational exposure tied to the lack of physical check inspection. RDC provides fraudsters with more opportunities and makes it harder to detect altered or duplicate checks.
Still, RDC can be both fast and secure if paired with the proper safeguards. We will break down the main threats associated with RDC and walk through practical ways to address them.
8 most common deposit capture risks
Remote Deposit Capture (RDC) offers speed and convenience, but it also introduces serious fraud risks. In 2024, 65% of financial institutions reported check fraud through RDC, and 80% of organizations faced attempted fraud via mobile deposits.
A 2025 AFP survey found that 63% of companies experienced check fraud in 2024, with RDC serving as a key entry point. These numbers make one thing clear: the risks are real and growing.
Here are the key RDC risks banks must address, along with what causes them and why they matter:
1. Duplicate check presentment (double deposits)
Fraudsters or users deposit the same check more than once, either by mistake or with intent to defraud.
RDC makes this easier: a user can submit a digital image of a check through a mobile app and then try to deposit the physical check elsewhere before either clears.
Why it matters:
Banks often miss duplicate deposits because they don't share real-time deposit data across institutions. By the time they catch it, the funds are long gone.
In 2023, RDC-related fraud exceeded $400 million, with a significant portion attributed to double presentment.
Common scenarios:
- Customers unintentionally resubmitting already deposited checks
- Fraudsters exploiting multiple banks or fintech platforms
- Collusion between account holders and external parties
- Lack of image tracking or duplicate detection algorithms
2. Altered and counterfeit checks
RDC opens the door to sophisticated check fraud involving forged, altered, or entirely counterfeit items.
Fraudsters utilize high-resolution scanners, editing software, and commercial printers to manipulate check images, making them appear authentic to basic verification systems.
Why it matters:
A 2024 risk survey reported that 94% of institutions experienced counterfeit check fraud, 90% encountered payee forgery, and 83% faced check-washing incidents.
Since RDC systems review scanned images rather than physical checks, they're more vulnerable to subtle visual manipulation.
Types of check fraud connected with RDC:
- Alterations: Changing the payee name, date, or amount
- Washed checks: Stolen checks, chemically stripped and rewritten
- Counterfeits: Fully fabricated checks using stolen account info
Emerging concern:
Criminals are combining these tactics with synthetic identities or mule accounts to deposit and withdraw funds, making it increasingly difficult to trace their activities.
3. Check kiting and float exploitation
Check kiting is the practice of taking advantage of the "float" – the time between depositing a check and when the bank confirms its validity – to withdraw or move funds before they're verified.
RDC has revived this old scheme in digital form.
Why it matters:
Despite the speed of RDC, banks often provide provisional credit before complete clearing. Fraudsters exploit this by rapidly transferring money between accounts or withdrawing it altogether, then disappearing before the check bounces and the fraud is discovered.
Tactics used:
- Depositing a fake or unfunded check into Account A, then moving funds to Account B
- Using multiple institutions to cycle deposits and exploit timing differences
- Creating chains of activity across personal and business accounts
4. Synthetic identity fraud and account takeover
Fraudsters are increasingly using synthetic identities, which combine real and fake data, to open fake accounts.
Others take over legitimate customer accounts using stolen credentials to commit remote deposit capture (RDC) fraud.
Why it matters:
RDC deposits made through these accounts often look normal until the checks bounce or chargebacks emerge.
Synthetic-ID-related check fraud increased 28% year-over-year, showing how criminals take advantage of digital onboarding and deposit flows.
Indicators of synthetic or compromised activity:
- Multiple new accounts opened using the same device or IP
- Unusual deposit activity immediately after account opening
- High-risk geographies or devices with no previous banking history
- Sudden password or address changes on dormant accounts
5. Cybersecurity vulnerabilities
Because RDC involves the transmission of sensitive financial data, it is a prime target for cyberattacks.
Malware, data breaches, credential theft, and insecure APIs all pose significant risks to organizations.
Why it matters:
If cybercriminals gain access to RDC platforms, they can submit fraudulent deposits, harvest account data, or reroute funds without being detected, especially if weak controls are in place.
Top threats:
- Insecure transmission of check images or metadata
- Mobile malware or rogue apps spoofing legitimate RDC functions
- Weak user authentication and outdated TLS encryption
- Exploited third-party SDKs or vendor APIs
6. Transaction and regulatory failures
RDC programs must comply with FFIEC guidance, Reg CC, BSA/AML requirements, and other industry standards.
Gaps in compliance can result in regulatory penalties, reputational harm, or legal exposure.
Why it matters:
Improper disclosures, inconsistent funds availability policies, or poor AML controls can invalidate the institution's right to reclaim funds, while opening the door to litigation and fines.
Common pitfalls:
- Outdated RDC agreements lacking hold disclosures
- Inadequate customer identity verification processes
- Missing CTR or SAR filings for suspicious activity
- Failure to monitor for structuring or anomalous behavior
7. Operational and human error
Not all losses come from fraud – many result from avoidable mistakes. Poor scanning, incorrect endorsements, or depositing checks outside the allowed parameters can lead to delays, returns, or loss of funds.
Why it matters:
Simple user errors or staff oversights can have financial and legal consequences. For example, depositing a check made payable to a business into a personal account can violate RDC agreements and trigger chargebacks.
Typical errors:
- Blurry or incomplete check images
- Missing "For Mobile Deposit Only" endorsements
- Deposits exceeding institution's limits
- Improper payee/account matching
8. Third-party vendor risk
Many institutions rely on third-party vendors for RDC software, image processing, or fraud screening.
If those vendors lack proper security or compliance practices, your risk multiplies.
Why it matters:
Vendor breaches or performance failures directly impact your customers and operations. Without transparency, institutions may not detect issues until losses have already occurred.
Key issues:
- Lack of independent audits or SOC 2 reporting
- Delayed incident response or breach notifications
- Weak vendor controls around user data and access rights
- Inadequate service-level agreements (SLAs)
Best practices to reduce RDC risks
Managing RDC risk requires a multi-layered approach. Key strategies include:
1. Build real-time risk scoring into the deposit workflow
Fraud can strike fast, often before a check clears.
By scoring each deposit in real time based on account history and behavior, banks can flag suspicious items and act before releasing funds.
What to do:
- Use models that analyze and check images and metadata the moment they're submitted.
- Factor in account history, deposit patterns, and known fraud markers.
- Automatically trigger holds or alerts for high-risk submissions, even if the dollar amount seems routine.
Why it works:
Fraudulent checks often look normal until the context is applied. Real-time scoring adds that context up front, catching risky items before they settle.
Pro tip:
Top banks utilize VALID Systems' Real-Time Loss Alerts (RTLA) to analyze check deposits in real time, flag high-risk items, and take action before potential fraud losses can occur.
2. Use AI-driven tiered hold policies
Regulation CC gives banks the flexibility to apply holds based on risk, and that's where AI-driven decisioning can make a significant difference.
How AI makes an impact:
AI models assess each deposit in real-time by analyzing a wide range of variables – customer history, deposit frequency, device behavior, check origin, and more.
Action steps:
- Deploy machine learning models trained on historical fraud trends to guide hold logic.
- Set shorter hold times for low-risk, returning customers with predictable behavior.
- Automatically trigger extended holds for deposits flagged as suspicious or anomalous by the model.
- Keep policy language transparent and straightforward to build customer trust.
Industry trend:
Digital-first institutions increasingly rely on AI-driven hold engines that dynamically adjust fund availability. They release checks faster for trusted users while protecting the institution from high-risk transactions, without manual review.
3. Detect duplicate deposits across banks
Duplicate presentment is one of the most common RDC threats, especially because fraudsters know most banks can't see outside their walls.
What you can do:
- Partner with image-sharing services or fraud consortiums that maintain multi-bank duplicate databases.
- Check for duplicate image hashes or MICR-line matches across external institutions.
- Support or join industry efforts like ECCHO's cross-bank detection networks.
4. Educate customers
Many RDC losses begin with good intentions.
A customer deposits a check, then tries again "just in case," or falls for a scam that directs them to cash a fraudulent item.
Best practices:
- Offer reminders in-app and on deposit screens (e.g., "Check already deposited?" prompts).
- Require or recommend "For Mobile Deposit Only" endorsements.
- Run email campaigns or short videos explaining check scams, spoofed payees, and why reusing a check image is never safe.
Why it matters:
A well-informed user becomes a frontline defense. They'll avoid common errors, recognize red flags, and reduce avoidable support volume.
5. Track deposit velocity and behavioral changes
Fraudsters exploit RDC by manipulating how and when they deposit checks, targeting timing, frequency, and behavioral patterns to avoid detection.
Sudden spikes in activity or unusual behavior often signal trouble.
What to watch:
- A dormant account suddenly submitted high volumes of checks.
- Large deposits from new devices or geographies.
- Users changing authentication settings right before activity spikes.
Pro tip:
VALID's InteliFUNDS detects behavioral anomalies and flags them instantly, allowing banks to release 99% of deposits immediately, while automatically holding the outliers for further review.
6. Make machine learning outputs actionable
A fraud model only adds value if it actually triggers a real-world decision. That means your ML system must plug directly into your deposit processing flow.
Steps to take:
- Connect scoring outputs to your hold-release engine or case review queue.
- Define thresholds that automate specific outcomes (e.g., auto-hold, manager review, flag-only).
- Include risk-score metadata and audit logs to support transparency.
Why this matters:
Insight without follow-through is just noise. Making models operational ensures they reduce losses in real-time.
7. Monitor and retrain your models on a schedule
Machine learning models don't stay accurate forever. As fraud tactics evolve, the system requires regular updates to stay current.
Routine maintenance includes:
- Monitoring detection KPIs: false positive rates, unresolved alerts, and missed frauds.
- Reviewing alert fatigue and analyst workload.
- Scheduling retraining cycles using the most recent, labeled data – ideally, quarterly or faster during known fraud surges.
8. Share risk intelligence with the broader industry
Fraud doesn't respect firewalls, account types, or brand names. What happens at one bank today could show up at yours tomorrow.
How to collaborate:
- Join a fraud intelligence group, vendor alert network, or real-time image-sharing platform.
- Trade anonymized data on risky checks, devices, or behaviors with peer institutions.
- Compare your fraud volumes and resolution times with those of benchmarked peers to identify areas for improvement.
Why VALID Systems is the right partner for RDC risk management in 2025
As we've seen throughout this article, Remote Deposit Capture brings specific risks that traditional controls often miss. The best way to stay ahead of these threats isn't by adding more manual reviews, but by using tools that detect and respond to fraud in real time.
VALID Systems delivers exactly that.
With over 20 years of experience and a client roster that includes top financial institutions like PNC, TD Bank, and Truist, VALID offers AI-powered solutions that bring precision, speed, and confidence to RDC fraud prevention.
What sets VALID apart:
RTLA© – Real-Time Loss Alerts
Identify and intercept high-risk check deposits at the point of presentment. RTLA's scoring engine evaluates each deposit as it happens, allowing banks to block fraud before funds are released.
InteliFUNDS© – Smart Funds Availability Engine
Enable instant access for trusted deposits while automatically holding those that show signs of fraud, manipulation, or suspicious behavior. This system strikes a balance between liquidity and risk without compromising the customer experience.
INclearing Loss Alerts
Uncover altered and counterfeit checks that bypass traditional filters. INclearing scans for fraud indicators in settled items, catching fraud that others miss.
VALID Edge Check Data Consortium
Leverage insights from a network processing over $6 trillion in checks annually. This extensive, anonymized database strengthens your fraud models with patterns from across the industry, not just your institution.
Want to see how VALID can boost your RDC strategy?
Book a free consultation today and learn how our advanced fraud prevention tools can help you protect your institution from today's most pressing RDC threats.