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CICS MC 3605

Updated: Dec 23, 2020

April 29, 2020


TO : All Clearing Banks/Institutions


RE : MULTIPLE PRESENTMENTS OF CHECK


1. We have been receiving reports/incidents of persistent attempts to re-clear Checks that are negotiated/paid earlier

via Mobile/Remote Deposit Capture or Mobile Check Deposit Facility (“Mobile Facility”) posing risks of monetary

loss to the Clearing Participants and ultimately causing bad customer experience.


2. On February 19, 2019, PCHC issued a caution notice through its Memo Circular No. 3514 (MC 3514) for participant

banks/institutions to implement strict KYC policy as primary safeguard against fraud and double presentment.


3. Along with the caution notice, the requirement was also imposed in MC No. 3514 for banks accepting check

deposits via Mobile Facility for clearing (“Presenting Digital Banks”) to instruct their respective depositors to write

certain details at the dorsal portion of Checks to be deposited via Mobile Facility.


3.1. The required Dorsal Digital Deposit Information (DDDI) are:

3.1.1. Name of Presenting Digital Bank

3.1.2. Account number at the Presenting Digital Bank to which the proceeds of the deposited Check will be

credited

3.1.3. Date of transmission of the image and data of the Check to the Presenting Digital Bank (i.e., date of

Check capture by the Depositor)

3.1.4. Endorsement of the Payee /Depositor


3.2. Any Check/Check Image bearing/showing DDDI is supposed to put banks on notice of its earlier deposit with

the indicated Presenting Digital Bank and should be refused acceptance (or further acceptance, that is, in the

case of the indicated Presenting Digital Bank).


4. It has been reported, however, as indicated above, that double/multiple deposits of Checks have occurred and the

incidents point to the need for changes to be effected.


Thus, in addition to the requirement for the aforementioned details to be written at the dorsal portion of the Check

for mobile deposit, the abbreviated name of the Presenting Digital Bank to which the Check is to be deposited and

the Account Number to which the Check proceeds are to be credited (“Front Digital Deposit Information” or

“FDDI”) should be placed also on the face of the Check - to be located in between the Account Name and Payee

line, to wit:

5. In view of the persistent fraudulent attempts, we again wish to remind bank personnel assigned to receive Checks

over the counter or to examine items for clearing to ascertain that the Checks / Check Images do not show DDDI

and/or FDDI and erasure/alteration on them, among other technical details, before accepting/processing the

transaction.


6. To give ample time for Presenting Digital Banks to inform their clients of the additional requirement of placing

FDDI on the face of the Check, implementation shall take effect on July 1, 2020.


7. On this matter of Mobile Check Deposit, PCHC was requested by the Clearing Officers of banks to set out rules on

the liabilities of Clearing Participants under the different scenarios discussed in the meeting between members of

the Board, Clearing Officers Club, Inc. (COCI) and PCHC.


8. However, inasmuch as settlement of any claim (which arises from a particular debit-to account that is questioned

by the Check issuer) will involve the Drawee Bank and the Presenting Bank only, it is deemed logical that instead of

rules on the recovery rights of the Drawee Bank and the liabilities of all the Presenting Banks pertaining to one

scenario of multiple presentments/payments of a Check, general guidelines be provided to govern one-on-one

evaluation of the rights and responsibilities of the Drawee Bank and the Presenting Bank involved in a transaction

in question. The guidelines for the settlement of a claim relating to multiple presentments are as follows:


8.1. Subject to the other rules/requirements of the CICS Rules and Regulations, the Drawee Bank is -

8.1.1. entitled to reimbursement from the Presenting Bank of the full amount of the Check if -

8.1.1.1. its Check Image shows no DDDI and FDDI but the Presenting Bank cannot present, upon request of

PCHC, the cleared Physical Original Check covered by the claim, or

8.1.1.2. its Check Image, with DDDI and FDDI, is presented more than once by the Presenting Bank.


8.1.2. entitled to reimbursement from the Presenting Bank of half the amount of the Check if the Presenting

Bank is not the depository bank indicated in the FDDI and/or in the DDDI shown in the Check Image,

subject to item

8.1.1.2 above.


8.1.3. is not entitled to reimbursement from the Presenting Bank any amount of the Check if -

8.1.3.1. its Check Image shows no DDDI and FDDI and the Presenting Bank can present, upon request of

PCHC, the cleared Physical Original Check covered by the claim, or

8.1.3.2. its Check Image shows DDDI and FDDI and the Presenting Bank is the depository bank indicated in

the DDDI and FDDI, regardless of whether the Presenting Bank can present the cleared Physical

Original Check covered by the claim


8.2. Reimbursement of the full /half of the amount of the Check by the Presenting Bank to the Drawee Bank shall

be implemented by way of the usual charge slip after the elements cited in items 8.1.1 and 8.1.2 above are

established in the settlement process to be administered by PCHC.


8.2.1. If the claim of the Drawee Bank against the Presenting Bank is not filed with or not settled through

PCHC, the procedure in item 8.2 above shall not apply.


8.3. If a Presenting Bank maintains that it has a basis to go after another Presenting Bank in accepting a Mobile

Deposit or OTC deposit/encashment that the former deems as having caused it to suffer damages (e.g., not

requiring or violating DDDI and/or FDDI), it may institute its claim against the latter in a court of law, that is,

not through the Arbitration facility of PCHC.


8.4. If a Clearing Item is a Counterfeit (deposited through Mobile Facility or deposited/encashed through OTC

Facility), the Drawee Bank is entitled to fully recover the Check amount from the Presenting Bank, regardless of

whether the Check is involved in multiple deposits, subject to provisions of the CICS RR.

9. We are also suggesting the following basic settlement procedure in case of double or multiple presentment of a

clearing item, as follows:


9.1. A Drawee Bank complaining about multiple presentment may report the incident to PCHC.


9.2. PCHC shall require the Presenting Bank to answer the claim and present the Original Check to PCHC within 5

days. If the Presenting Bank does not answer the claim within said period, the elements under items 8.1.1.

or 8.1.2, as the case may be, shall be conclusively presumed to have been established.


9.3. If the elements cited in items 8.1.1 and 8.1.2 above are established or deemed to have been established, the

Presenting Bank shall reimburse the Drawee Bank in accordance with said provisions.


9.3.1. The procedure and liability suggested above are drafted on the premise that the clearing item or the

Check covered by the claim has no other defect or has no reason to be returned except that it is

presented more than once (other than for a valid re-clearing).


9.3.2. In all claims filed with PCHC, penalty shall be imposed on any Presenting Bank which cannot present the

cleared Physical Original Check covered by the claims. The penalty shall be in the amount of Php1,000 per

item payable to PCHC for violation of Section 12 of the CICS Rules and Regulations.


10. The settlement procedure proposed above are presented for your comments and/or additional inputs before we

consider adopting the same as part of our Operating Guidelines.


11. You may submit your feedback to Mr. Anthony Joe Manongas via email at thonymanongas@pchc.com.ph on or

before May 15, 2020.


12. We count on your full support.


MC.3605.Multiple Presentments of Check
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