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Preemptive procedures a must for ACH card protection

Sep 17, 2013 Dave King

Automation has become a more common practice among enterprises and financial services providers in recent years, as it can save time and money when it comes to regular payment processing procedures. However, hackers and other perpetuators of fraud continue to target ACH cards and wire transfers to steal sensitive information and money.

Businesses need to take as many proactive measures as possible to protect information transferred through automated clearinghouse payments and other wire exchanges. The damages of fraud and more specifically data breaches can be crippling, especially for smaller companies that do not have a lot of wiggle room when it comes to budgets.

Between extensive network monitoring, data security and oversight protocols, organizations can enjoy the benefits of ACH cards while avoiding the issues related to fraud. The best defense is a good offense in these situations, but too many companies institute the necessary changes to security in a reactionary fashion following a major breach of databases or wire exchanges.

Identification comes first
Bank Info Security recently asserted that banks and other financial services providers are having major difficulty when trying to attribute losses of information to specific sources of fraud. This process is especially difficult when an organization is caught off-guard by a fraudulent event, or one that goes on for months before being discovered by accounts payable and receivable staff members.

According to the news provider, account takeovers are becoming the strategy of choice for fraudulent parties, and involves the creation of outages that don't allow users to access information and networks. Strategies such as this one are avoidable with the right protections in place, but can be extremely difficult to bounce back from once they are enacted.

The source cited the results of an Information Security Media Group study which found that account takeover fraud might not actually be on the rise, but rather incendiary forces are using new tactics that have yet to be identified. In the fight against ACH card and wire fraud, identifying the source of the issue and the type of the attack is the first step toward reconciliation.

When a firm cannot establish what caused the problem or where it originated, the chances of preventing it from happening again are slim. What's more, failure to identify the source could mean that fraudulent activity is still occurring on the very same accounts. This could lead to long-term instances of theft, which tend to be the most damaging for both finances and reputations.

Bank Info Security added that despite the concerns of most decision-makers, half of the respondents to a recent survey said that they do not feel prepared to protect against ACH card and wire fraud. More than one-third of the same group experienced a similar crime in the past year.

The power of policy
As mentioned above, reactionary measures are often the least effective in protecting the financial health and reputation of a firm. Decision-makers need to ensure that policies are created and aligned with any and all threats that could potentially lead to fraud.

The most effective policies will often take a risk management angle on the protection of information, incorporating statutes that apply to both personnel training and technology resilience. For example, data security software and firewalls are among the most effective defenses against fraud, while encryption can also help.

Since the majority of data breaches occur as the result of human error or internal threats, all staff members should be taught the best practices of data and privacy protection. Having an all-hands-on-deck ACH card and wire transfer security strategy will minimize the threat of fraud and data breach.