We cashed a check for a non-customer because the business that had written the check was one of our customers. However, this particular business account was not at our bank.

We received notice back that the check was duplicate because it was was already deposited via a mobile device at another bank.

This is new for us. What recourse do we have?

Under the current law and regulations, I think you're left holding the proverbial bag, with recourse only to the individual who cashed the check, who is probably the same individual who deposited the check via his mobile device. You could try to appeal to his sense of honesty (assuming you feel it was an error on his part) or you could toss in the thought of legal action.

Or you could chalk it up as a learning experience and consider how to tighten up your check cashing procedures so that you always have recourse for a check that's not drawn on your bank.

The Federal Reserve Board floated a trial balloon in its most recent Regulation CC amendments proposal. It suggested (and invited comment on) a new indemnity provision be added to the regulation that would have a bank accepting a remote deposit captured item for deposit who does not receive that item back unpaid indemnify a bank that takes the actual check for deposit but receives the check back unpaid because of the duplicate presentment, to the extent of the latter bank's loss (inability to charge the check back to its depositor). The theory behind the proposed new indemnity is that banks that accept RDC items create the risk that the same check will be deposited one or more additional times, and should take on that risk themselves.

I hope the indemnity is finalized substantially as it was proposed. As more and more mobile RDC (mRDC) depositors are approved by banks, the odds of multiple presentments -- either deliberate (read: fraudulent) or inadvertent -- continues to rise.

Thanks John! Yes... there will definitely be a change in check cashing procedures!

On a related note, what happens in this instance? Our account holder wrote a check to someone who banks at another institution. He deposited it via mobile deposit in January, and then again at a teller station in May. Unfortunately, it hit our customer's account twice. Since we are more than 60 days out, what is our recourse and what processes/procedures do other banks have in place to prevent this?
Thanks!

Compare the situation with paying a check that wasn't authorized by your customer, doesn't meet the definition of Remotely Created Check, and wasn't returned within your midnight deadline. The UCC in most states would give your customer a year from delivery of the statement reflecting the second charge for the check to claim it was unauthorized. That year can be shortened by contractual agreement of the parties. Does your bank have a contractual provision that limits the time for such a claim?

As for processes/procedures, an increasing number of banks have systems that can detect double presentments like this by comparing an item presented for payment against account history, thus allowing them to detect the double-dip in time to meet the midnight deadline.

Thank you!