CICS MC 3514
Updated: Dec 2, 2020
Memo Circular No. 3635
December 02, 2020
TO : All Clearing Banks/Institutions
RE : CAUTION ON DUPLICATE PRESENTMENT OF CHECKS
PCHC has received reports on attempts to present cleared/negotiated clearing items/Checks that were previously captured, particularly via mobile device. These presentations were not successful as the concerned Drawee Banks were able to detect the second presentment of the items since they have ways of checking duplicates against their respective databases. Nonetheless, we would like just the same, to remind all our participant bank/branches to be vigilant/cautious when accepting Checks for clearing.
For your information, ING Bank has adopted/implemented mobile check capture through its digital banking platform allowing its clients to deposit with said Bank Checks in the form of their images captured via mobile device/s. There are also other banks contemplating of adopting/implementing the same technology soon.
Each bank must therefore continue to implement strict KYC and put in place layered safeguards against fraud and double presentment as there is the possibility (as reported) that a Check already captured and electronically deposited earlier with a bank that allows/accepts electronic deposit of Checks (the "Digital Depository Bank" like ING) may, inadvertently or intentionally, be presented/deposited in its physical or original form to/with another bank.
We strongly recommend that the following measures be adopted, to wit: 4.1. When looking at the back (dorsal) side of a physical Check as presently being done, the accepting bank shall make sure that there is no previous negotiation made prior to acceptance . Erasures or alterations on the dorsal side of a Check should not be
disregarded. 4.1.1 For the information of non-Digital Depository Banks, as a control measure against
fraud or double presentment of Checks, the following details: a. the name of the bank (i.e., the Digital Depository Bank);
b. the account number in the Digital Depository Bank to where the Check
amount would be credited;
c. the date of presentation, and
d. the endorsement of the Payee by affixing their signature
are required by the Digital Depository bank to be shown on the image of a check
(the "Digital Check") that is deposited with it. The mobile check capture process
therefore requires a client intending to deposit checks electronically (the "Digital
Check Depositor") to indicate all the information mentioned above on the physical
check prior to its mobile capture.
4.2. If an endorsement is already indicated or if there are erasures or duplicate indication of
account number at the dorsal side of a physical Check, a bank should refused
acceptance of such a Check for deposit.
4.2.1 If a physical Check shows no erasure or any indication/writing at its dorsal side at the time of its deposit but turns out later to have already been paid or honored,
the Drawee Bank and the Presenting Bank should report the incident to PCHC
which will then endorse to the relevant bank/s for proper action.
5. As more banks are looking at the potential adoption of remote/mobile check capture or acceptance of Digital Checks, we enjoin our participant banks to establish layered protective measures in order to help one another prevent or mitigate against possible fraud committed by or in the name of Digital Check Depositors. While strengthening KYC policies is one key area, it would be essential, if not yet done, for banks to build or have their own database of negotiated/paid Checks to avoid double negotiations/debits on account of duplicate presentation.
6. We count on the mutual cooperation of our participant banks.