Remote Deposit Capture (RDC) Risk

What is Remote Deposit Capture (RDC)?

Remote Deposit Capture (RDC) as its name implies is a method to remotely capture a physical paper check and deposit it in the bank. The way it works is that the system captures images of the front and back of the paper check, scans the image and information for potential fraud, and then performs the actual money movement using the Automated Clearing House (ACH) network.

RDC Financial Risk

Like ACH, RDC is a one-way messaging system for payment processing. Meaning, that a transaction in RDC is assumed to have succeeded unless the receiving bank sends a failure notice.

Based on the reason for failure, the receiving bank can have up to 60 days to fail a transaction. This means, if you released an RDC credit in 3 business days to your user, you might still receive a failure note (also known as a Return) up to 57 days later.

RDC Risk Categories

UnauthorizedThese returns occur when the account holder of the bank account that the check belongs to informs their bank (receiving bank) that the transaction was not authorized by them or points out some other fraudulent issues with the check. RDC guidelines allow account holders to take up to 60 days to report checks as unauthorized. Return codes CHR03, CHR14, CHR17, CHR24, CHR25, and CHR26 signify unauthorized returns.

Administrative Administrative returns indicate that a transaction was returned due to administrative or account data errors. They occur within 3 business days of settlement. Return codes CHR02, CHR03, and CHR04 signify administrative returns.

Other The rest of the returns are other types of returns allowed by the RDC network. Like Administrative, these returns also occur within 3 business days of settlement.

RDC Forgery Fraud If an RDC is returned due to forgery, there is no time limit against its return.

Return Reason Codes

The RDC - X9 network signals a return code when an RDC transaction is rejected. The risk level varies based on the return reason code as noted below: