February 28, 2014, 8:57 AM — If you use Bank of America's iPhone app to deposit checks, beware. You could lose thousands of dollars, because though the app tells you that your deposits go through, the bank may later disallow them, even if they're valid checks with cash behind them -- and the bank won't even bother to tell you that it took money out of your account. That's exactly what happened to me. Read on for the gruesome details.
Several months ago I began using the app. It has saved me substantial amounts of time. With it, rather than having to go to an ATM, all you need to do is sign your check, take a photo of the front and back of the check using the app, enter out a few pieces of information, tap a button or two, and you're done as the image gets sent to Bank of America, and the check gets credited to your account.
During the process, if the app finds that the check image isn't clear enough, it won't send it to the bank, and will tell you that you need to take another photo. On occasion, even after you take a photo several times, the app won't accept it. At that point, you'll need to head to an ATM or the bank and deposit the check.
But I found out that just because the app sends the image, and just because the app confirms that the check was deposited, that doesn't mean that the bank will actually accept the check, even if it's a valid one. And the bank won't bother to tell you that it's turned the check down -- even though the app tells you that the check has been deposited. That's exactly what happened to me.
I deposited a check a week and a half ago for several thousand dollars, using the app. The check was a standard-looking check for several thousand dollars from a large, reputable company with plenty of money behind it. I've been receiving their checks for years. They certainly don't bounce. I used the Bank of America app to deposit the check, as I have done before with checks from the company. It went through without a problem, as always. I received the usual confirmation that the check was sent and deposited in my account. I thought no more about it.
Until last night, that is. I was checking the balance on my accounts online, and noticed that one was several thousand dollars short of what it should have been. I looked at the account details, and saw that the bank had subtracted from the account the amount of the check I had deposited a week and a half ago. And it hadn't bothered to notify me that it did that. The problem wasn't that the check bounced -- it was written by a large business, and so the check was fine. The problem was that...well, let me print for you exactly what the bank said online. It wrote that the problem was:
"...RCK ADJ non conforming image item on 02/18/2014 in deposit of..."
Translated into English, that means that even though the app told me the image I took of the check was fine, the bank later decided that it wasn't for some unexplained reason, and refused to credit my account for the deposit, even though it had previously told me it had done that. The bank subtracted the check amount from my account. I never received a notice from the bank that there was a problem with the deposit. I was never told that the bank had subtracted its amount from my account. So I assumed that I had thousands of more dollars in my account than I had. And I assumed that because that's what the bank's app told me.
Luckily, I had enough in the account to cover any checks that I would have written, so none of my checks bounced. And even more luckily, I hadn't thrown away the check. If I had, I would have had to try and get a check re-cut, while operating without thousands of dollars I actually had, even though the bank said I didn't have the money. So I'm on my way to I deposit the check via an ATM,
But you should be forewarned. Based on my experience the Bank of America's iPhone app can't be trusted. If you trust it, you could be out thousands of dollars or more without knowing it.
Read more of Preston Gralla's Power of One blog and follow the latest IT news at ITworld. Follow Preston on Twitter at @pgralla. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.