There is no fountain of youth, or miracle cure for many diseases, but the banking business several years ago got all the regulatory agencies to let go and allow banks to distribute scanning devices to their clients. Bank customers now have the ability to create deposits and submit them directly to their accounts via a small scanning device right from their desktop. What we would like to talk to you about this month is the devices themselves and the responsibilities surrounding those devices and the checks you deposit through them.

The scanners are equipped with a great deal of software to accomplish a variety of tasks:

The proper way to scan a deposit is to first total the checks you are about to scan. This provides a batch total to balance to at the end of your scanning session. Now I say that with some reservation as many of you do not do that today. Normally checks are piled into the scanner and transmitted to our lockbox department (Scan to Lockbox Option) or you are scanning checks directly to the association’s account. Regardless of what method or direction you are scanning, a total of all the checks you are scanning should be made to balance to at the end of your batch.

Rejects – Any item the scanner could not read, for a variety of reasons, the scanner will note a Red circle  with a White “X” in the middle on the scanner display and within your batch listing. These fields can be manually corrected to reflect the original check information. Money Orders with proper print quality are generally the most likely suspects in these situations.

Foreign Checks can’t be scanned and will reject. On rare situations you may receive a check drawn on a Canadian bank in US funds, which may work but please review the MICR line on the check and see if it is printed with the nine digit bank routing number. If not, you will need to mail all foreign checks to our HOA Relationship Banker for hand processing. Please note the difference in the exchange rate will be deducted from, or added to, the operating account when the check is processed.

We have a very specific set of rules that surround the operation of the scanner with regard to the handling of scanned checks. The scanner prints ‘SCANNED FOR ELECTRONIC DEPOSIT” on the back of the check to let you know the item has been previously scanned. We also recommend you stamp the face of the check ‘SCANNED’ or ‘SCANNED ON [Date]’ and insert a date it was scanned. 

Once the original check has been scanned and deposited it is a dead item and cannot be rescanned again. If the check is returned for any reason, you will receive an IRD (Image Replacement Document) which is a copy of the original check with an alternate MICR line attached. This IRD can be deposited just like the original was.  You should compare all the deposits you created via the scanner the following day to ensure they were all credited correctly and then file them in a locked storage area for a minimum of 60 days. 

**Any re-scanning of checks previously scanned and deposited is a serious violation of the guidelines set by the federal reserve and our bank. Under these circumstances your scanning abilities may be removed.

Case in Point: Original checks were scanned to the operating account of an association. The scanned checks were not properly handled and stored. The following month the association changed management companies and the transfer packet included some of the previously scanned checks. The new management company did not review the backs of the checks and re-deposited them again in the association’s new bank account. We were charged with the re-deposited checks as we were involved in the first deposit and because all the association’s accounts had been closed, the management company is now responsible for the loss or collecting the funds from the new management company. 

**Any checks you deposit are your responsibility. If they are mishandled the subsequent loss will reside with your company. The client has up to two years to identify and return a charge for the duplicate check processing. This is not something you want hovering over your head.

I understand this machine looks harmless but it’s a $550.00 instrument that can create a whole lot of problems for you if not handled properly. Our Service Guide has the scanner rules included and a whole lot of other important information. Please do not hesitate to ask for a copy. Some prefer the electronic version but we also have a limited amount of paper copies.

TOP 4 things to remember when using the Deposit Scanner
  1. Once you have scanned a check it's dead & can't be re-scanned. You must wait for the IRD to re-run the item.
  2. Add up the total amount of checks to be deposited to balance to your batch total.
  3. Foreign Checks can’t be run through the scanner.
  4. Once you have verified your checks have processed correctly please store in a secure cabinet and destroy them within 60 days.

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