Financial institution learns the importance of securing ACH payments

Businesses and financial institutions lose tremendous sums of money due to various forms of fraud every year. Now, with the digital revolution, these risks are even more apparent, as electronic debt collection and data storage create new security challenges. Enterprises and financial institutions need to ensure the integrity of applicable practices to avoid losing face and funds. Small businesses, which generally have the least to lose in enterprise, have been the hardest hit in recent years. According to Business Fraud Prevention, LLC, small businesses ranked highest in fraud frequency in 2010, as 31 percent of all instances occurred in those enterprises. Additionally, the source cites that billing schemes remain as the most common form of fraud against organizations. PCWorld recently reported that one financial institution did not properly safeguard its Automated Clearing House payment processing security. As a result, a construction company based in the United States lost hundreds of thousands of dollars in fraudulent wire transfers. A Federal Appeals court ruled in favor of the business, leading to the bank providing restitution. The news provider noted that the business and financial institution could have avoided the entire debacle by paying more attention to the records and better ensuring the security of the ACH payment technology.