Montreal

RBC customer's cheque was cashed twice. He says his bank shouldn't have let it happen

With the vast majority of paper cheques now deposited via mobile app, a security expert says it’s cheaper for banks to reimburse clients than change the deposit system.

Security expert says it’s cheaper for banks to ‘ignore’ gap in mobile banking system

A man stands in his kitchen in front of a laptop.
Christopher Michaels says a $150 cheque he gave as a wedding gift nearly two years ago was deposited twice — once in July 2022 and again in December 2023. (Charles Contant/CBC)

A Montreal-area man is questioning his bank's security practices after one of his cheques was deposited twice.

About a month ago, Christopher Michaels was doing his taxes when he noticed a $150 cheque on his bank records that he did not remember writing.

"There's not a lot of cheques that typically go through that particular account," said Michaels. 

"It was just odd."

At first, he thought it was for his snow removal company. But it turned out to be a cheque he'd given as a wedding gift nearly two years earlier.

The cheque was first cashed in July 2022 — and again in December 2023.

Banks don't have to cash a cheque if it's too old, which is usually six months after the date it's issued. But this is just a federal guideline, not a law.

"I've misdated cheques before," he said. "And I've had people come back to me and say, 'Oh, the bank won't accept it, you have to submit me a new cheque'."

When he took a closer look, he saw his cheque was deposited into two different accounts using a mobile application, which allows customers to deposit cheques by taking a photo. 

Michaels reported it to his Royal Bank of Canada branch and filed a police report. But he's upset that his bank did not detect it in the first place.

"I think it's definitely like a flaw in the system," said Michaels.

Although his bank suggested it was probably a "one-off," at least one other wedding guest told Michaels their cheque was also deposited twice.

CBC News was unable to independently confirm this, but reviewed text and Facebook messages that suggested Michaels was not alone. 

"You'd assume that some cheques would be flagged and then they would investigate that account and look back at all the other cheques that were cashed," said Michaels, a resident of Saint-Lazare, Que., an off-island suburb west of Montreal.

WATCH | A look at why cheques can be deposited twice: 

Cheques are being cashed twice. What are banks doing about it?

10 days ago
Duration 2:00
Canadians are still writing hundreds of millions of cheques every year, and while there are convenient methods to cash them that don't involve visiting a branch, some say those methods are flawed.

'They just ignore it'

Last year, more than 276 million cheques were written in Canada, according to Payments Canada, the government agency that's responsible for setting the rules around financial transactions.

That's down from 345 million in 2020.

The vast majority of cheques are deposited using a mobile banking app.

Despite the popularity and convenience of these applications, banking security expert Chester Wisniewski said banks don't have a good system in place to detect double cheque deposits.

"The issue is the fraud levels are small and fixing it is expensive, so the banks don't care," said Wisniewski, a research scientist at the cybersecurity company Sophos.

He said this puts the onus on customers to frequently check their statements and to report problems immediately.

Most victims don't catch double deposits, said Wisniewski.

"To compensate a few thousand victims a few hundred dollars each is so much cheaper than designing a whole new system to try and prevent this fraud that they just ignore it," he said.

He suspects the mobile applications are fully automated, which he said is a huge cost savings for the banks, who don't have to process cheques through an ATM or by a teller.

A wearing a blue shirt man poses for a photo.
Chester Wisniewski, a banking security expert, says cheques are an antiquated way of transferring money and encourages people to use email transfers instead. (Simon Gohier/CBC)

Overhauling the system would require communication between the banks, he said, and developing a way to cross-check transactions in a shared database.

He is not aware of such a system and doesn't even think individual banks can do it easily because third parties can print checks.

Wisniewski said the bigger issue is that cheques are an antiquated way of transferring money.

He encourages people to stop using paper cheques and opt for email bank transfers instead, even for small amounts of money.

Money reimbursed after CBC inquiry

CBC News contacted the five largest banks in Canada about how they prevent and detect double deposits, but all five said those questions should be directed to the Canadian Bankers Association (CBA), which represents Canadian banks.

A photo of a large RBC logo on the side of one of its buildings.
RBC reimbursed Christopher Michaels's $150 cheque after CBC contacted them. (Andrew Vaughan/The Canadian Press)

"Banks are constantly evolving their security measures to safeguard client information and funds against new types of emerging threats, including controls to prevent and detect cheque fraud," said CBA spokesperson Maggie Cheung.

If a duplicate deposit is detected, the association says customers should contact their bank immediately. 

Based on Payments Canada's guidelines, banks can return a duplicate item up to 90 days after it is deposited, said Cheung.

Michaels didn't notice his double deposit until nearly five months after it was cashed.

"I wasn't 100 per cent confident I would get my money back," said Michaels.

But after CBC News contacted RBC, Michaels's money was reimbursed and he received an apology. In an email, RBC told CBC "protecting our clients' personal, business and financial information are among our highest priorities."

While Michaels is happy it's resolved, he thinks financial institutions need to do a better job of protecting people's money. 

"In my case, it's $150. It's not a lot, but what about if I am a person who lives paycheque to paycheque? That money could be very important," said Michaels.

"These cheques have codes, right? I assume they're all unique codes and they're not the same. Once they are cashed, it's kind of like, you cannot cash it again."

He encourages people to go through their accounts at least once a month in depth and contact their bank right away if there's a charge they don't recognize.

"If you don't do that, there's things that fall through the cracks. Kind of like what happened with me."

ABOUT THE AUTHOR

Leah Hendry

Journalist

Leah Hendry is an investigative reporter with CBC in Montreal. She specializes in health and social issues. She has previously worked as a reporter for CBC in Vancouver and Winnipeg. You can email story ideas or tips to montrealinvestigates@cbc.ca.