If a check is deposited for the wrong amount, the bank will detect the error and return the cheque as Wrong Amount. If the bank does not catch the error, you should report it as soon as possible.
A cheque can be deposited into an account for an incorrect amount, due to a number of reasons. Today, most people do their banking online or through the ATM, or even remotely via a remote deposit scanner. If you are a business, a remote deposit scanner connected to your banking portal will allow you to scan customer cheques right into your account. This is commonly referred to as Remote Deposit Capture service.
Popular Remote Deposit Cheque Scanner Devices
- CheXpress® CX30
- TellerScan® TS240
In reality, all cheque deposits require a scanner to read a few line items on your cheque. A cheque scanner will read the dollar amount, the written amount as well as the MICR line. The MICR line is the code looking line of numbers you see at the bottom of the cheque. If the MICR line is not clear or smudged during the scan, the cheque deposit will likely fail.
The MICR line tells the banking system which account to debit (take money from).
Often times, cheque scanners can fail at what they are meant to do. Your deposit cheques may be read incorrectly, and one of the following may occur:
- An incorrect account is debited
- An incorrect amount is deposited
- An incorrect currency is used for the deposit
- A cheque can get flagged as a counterfeit item or materially altered item
Cheque Deposited for Incorrect Amount
When you deposit a cheque in your account, and you get credited a different amount – the error will most times get picked up by the bank. The bank will make a manual or automatic correction to your account.
It is likely the bank has not yet picked up on this error – so you can definitely report it to your branch or back-office operations team. These teams make manual corrections to your account to fix common banking errors such as these.
There are different rules in various states and countries that govern the time-period within which an item must be returned for the reason “Wrong Amount”. In Canada, this is all governed by Payments Canada. In the USA, there are different state rules – so you should reference your banking service agreement for further details on the recourse period.
As a note, in Canada – if the amount of the cheque is below $20.00, the bank is not required to return the cheque.
Every bank will have a cheque image retrieval system, where the bank can pull a copy of the cheque that was deposited. You can always request a copy of your deposited cheque to verify the details of the cheque with what is presented on your statement.
Mobile Cheque Deposit in Wrong Amount
With advancements in digital banking, more banks are pushing their customers to use services such as mobile deposit to make cheque deposits. While these mobile app services work conveniently for most users – once in a while, it can break its cycle.
We have seen mobile deposits for cheques get credited for the wrong amount. This can happen when you input the wrong amount while depositing the cheque. If you are in this position, please take note of what can happen next.
- Your bank will deduct the error and make a correction to your account.
- Your bank may not detect the error, and you may have to inform your bank about the error.
In almost 96% of situations, the bank will detect this error. The cheque you submitted via mobile deposit will be read through the scanner, and the scanner will pickup that there is a discrepancy in the cheque amount. The correction will take place (sometimes overnight) and you will see the credit/debit in your account.
Most cheque deposits will initiate a 5-day hold on the amount. This hold is to ensure there are funds in the account of the person who is paying you. If there are insufficient funds in the payer’s account, then your cheque will get returned for Insufficient Funds. If you are ever worried about this situation, you can request the payer to give you a bank draft or certified cheque.
A bank draft and certified cheque is a type of verified cheque, confirming there are funds available. For example, when a bank draft is purchased – money is immediately debited from the payers account and placed onto a temporary account for the draft item. This will ensure there are funds available when that draft is cashed by the payee.