The Dangers of ACH Fraud and How to Protect Your Business

Fraud is on the rise, with the first 6 months of 2020 seeing 65 attacks per second in the gaming industry. The top countries for malicious activity include Russia and the Phillippines. 

If you're a business owner, then you might wonder how to protect your company from ACH fraud. While it might seem tough to protect yourself in the digital age, there's hope. 

This article will go over the dangers of ACH fraud, and how you can protect your business. Read on to explore these different methods and protect your business today. 

What Is ACH Fraud? 

When you hear the term fraud, you might think of different frauds in history, such as with the company Wirecard. They were an electronic payments company that lied about their financials. 

ACH stands for the automated clearing house. Fraud happens when an unauthorized transfer of funds goes into a bank account.

In order for ACH scams to occur, they only need your bank routing number and checking account number. One of the most common methods of obtaining this information is through a phishing scam. 

Phishing scams are cyber-based, and where a hacker will target your phone, email, or text. They can pretend to be a professional business, and trick you into giving personal information such as your bank account or passwords.

They can then access your bank accounts and cause financial loss. For scammers to go undetected, they might change the account's contact information.

What they do is change the contact information to someone within their scamming network. Your financial institution will call to go over the charges, and the scammers will confirm them. 

ACH Fraud Risks

ACH fraud can occur when an employee alters the data in a customer account and places funds. This happens because employees have access to customer accounts. If you don't protect your business, you run the risk of a costly impact on your company. 

1. Educate Your Staff

Let your employees know about the damage that ACH payment scams can cause to your business. Educate them on the different safe practices and tools they can use to avoid phishing and malware attacks. 

Be knowledgeable on:

• Anti-virus and anti-spyware software
• Add coverage for loss due to bank fraud
• Use credit cards over checks for business expenses
• Have fraud alerts set up

2. Encryption

Encryption is when you have to decipher and ciphering of data. These characters will go through an algorithm that's locked with a key. That same key can unlock data, and anyone with that key can decipher the text. 

3. Authorization

When you use authorization, this is where the receiver and originator have an agreement that lets the originator start a debit entry to the receiver's bank account. The receiver will need to show that they trust the other party in order for this to go through. 

4. Transaction Monitoring

Use transaction monitoring to evaluate and detect ACH scams. Get into a habit of checking for any fraudulent activity. 

5. Authentication Tools

Use authentication tools to confirm identity information before transactions. This can include before hiring an individual for your business. ID verification tools let you search across multiple data sources including international and Federal watchlists. 

Within websites and call centers, you can place what's called ID Authenticate. This will let you and your employees confirm someone's identity through questions only that person will know the answer to. 

6. Ignore Suspicious Emails

Never open attachments, download programs, or emails from misspelled or foreign emails you don't recognize. Especially those who ask for your business account information. 

7. Educate Yourself

While educating your employees on wire fraud and ACH scams is important, educate yourself as well. It's vital that you're knowledgeable on different news topics, and stay up to date on the newest threats out there. 

8. Advanced Analytics

Use analytical models that have all available data within an institution. This can show patterns of behavior that might not be seen.

9. Payment Solutions

Have all electronic checks and returned checks be deposited into one centralized account. Move from ACH to eChecks for better fraud protection. This will also decrease bank fees that you can experience with returned checks. 

You'll have all returned checks and deposits identified fast. All deposits are pre-screened through a Risk Verify Database Plus in order to reduce unauthorized returns. These payment solutions offer you to manage and be in control of ownership.

Suspicious Behavior

Keep in mind that new accounts are riskier than older accounts. What is the relationship between that new account and your company? 

Take a look at your customers and any abnormal online activity you notice. Have they recently changed their account information? 

Preventing Hacking

Since most ACH processing is done online, malicious attackers can hack into your ACH and cause problems. This can include vendor impersonations, email phishing, account takeovers, and cyberattacks. 

In order to stay protected, avoid storing electronic track data or card security numbers. Use encryption on phone recordings. Have encryption on all debit and credit card account information.

What To Do if You Experience ACH Fraud? 

You'll want to act right away and contact your bank if you experience ACH fraud. Cancel all existing credit cards within your credit card companies. 

Contact law enforcement agencies and report all fraud. Contact an attorney to go over legal facts. Close accounts and change passwords right away. 

Exploring the Dangers of ACH Fraud

Now that you've explored the dangers of ACH fraud and how to protect your business, you should have a better idea of what to expect. Are you ready to get started and protect your business today? Contact us today, and we'll answer any questions you have and ensure that your business is protected from potential threats.