The news that Fidelity Investments has greatly limited the amount of money that customers can put into their cash-management accounts through its mobile app has made people wonder if other banks will follow suit.
A story in the Wall Street Journal says that after a number of check scams, Fidelity cut the maximum mobile deposit for some customers from $100,000 to $1,000. The plan was like what some Chase Bank customers did not long ago: they deposited fake or altered checks with the hope of getting their money back or investing it right away.
The time it takes for banks to process checks and put money in customers’ accounts can vary from multiple days. But in the cases of Fidelity and Chase JPM 0.34%, some or all of the money on the check was available right away. This meant that customers could use the money before the checks were found to be fake.
“We recently found people trying to commit fraud using their Fidelity accounts.” “We will not stand for any kind of illegal activity, and we acted right away to deal with the problem,” a Fidelity spokesperson told BourseWatch.
Chase said it fixed a recent fraud problem, but it didn’t say how it was fixed. However, someone who knows the bank said it hasn’t dropped the limits on mobile deposits. A report from the Wall Street Journal says that Fidelity’s new, smaller mobile deposit limits only apply to its cash management accounts and not to some investment accounts like 401(k)s or Roth IRAs.
Still, what about the limits on mobile deposits at the rest of the country’s banks? A study from MyBankTracker found that these limits can be very different, ranging from as little as $500 per day to as much as $30,000 per day. There may also be monthly limits.
Simon Zhen, Managing Editor of MyBankTracker, told MarketWatch that banks probably won’t want to lower their mobile deposit limits, even after the Fidelity case. He said that this is because most banks set the present limits with fraud risk in mind.
Wipfli is an advisory and accounting company, and Anna Kooi is the head of their financial institutions practice. She said that you should never say never. She said that check fraud is getting worse and pointed to a recent study from the industry that showed that suspicious activity rose by 90% from 2021 to 2023.
Even though banks are very good at using technology these days, Kooi said it’s still easier to spot a fake check by looking at the real one in person instead of depending on a photo sent through a mobile app.
Kooi and other experts in the field also said that banks have started to accept mobile deposits because they are more convenient and don’t need real branches. Banks also know that customers like how easy it is to pay money with their phones.
But, once more, the chance of scam is something that can’t be ignored.
“Banks have to find a balance between security and ease of use,” said David Donovan, who is the head of financial services at the global digital consulting firm Publicis Sapient.
Still, experts say that if you’re a customer who wants to make big deposits through a mobile app, you have choices that will let you do so even if limits are put in place or come up in the future.
To begin, you can always choose a better bank account, such as a “gold” account. These types of accounts usually require you to keep a bigger balance each month, but they do have perks, and one of those is usually higher mobile deposit limits.
A digital banking solutions provider called Alkami Technology ALKT 1.63% has a senior product strategy manager named Jeff Bucher who said you can also just ask a bank manager for a higher saving limit. He said that they want to keep your business, especially if you have a lot of money.
