Eli5, how do checks work. Especially now that we can deposit them via phone now. What stops us from creating (e.g., photoshooting) fake checks all day.

Question

Eli5, how do checks work. Especially now that we can deposit them via phone now. What stops us from creating (e.g., photoshooting) fake checks all day.

In: Economics

Answer 1

Former financial security manager here.

Someone with a new account and a low balance is going to have to wait until the authenticity of the check and the covering funds are there.

Someone with a well-established account and perhaps multiple relationships with a bank and a record of many mobile deposits will be able to access the funds from a deposit much more quickly- typically overnight. The bank knows it’s much less likely that someone with years of financial records and credit cards and a mortgage is going to blow all that for a few hundred bucks.

TL;DR it’s basically assumed that if the amount of a deposit is trivial to the customer, it’s very likely to be legitimate.