Fighting financial fraudsters is a constant, ever-evolving battle. Fraudsters are opportunistic, paying attention to organizations’ countermoves to their own attacks. You can imagine the battle against fraud to be like a game of chess. With every move an organization makes to protect itself against fraud, the fraudster is observing that move and devising a plan to counter it.
It’s important for businesses to stay vigilant in their fight against fraud, proactively preparing for their next move to protect against the latest strategies being put into practice by fraudsters. Understanding the latest trends in fraud practices can ensure businesses are not caught off guard by a new form of attack.
ACH Fraud is On the Rise
The most common forms of fraud traditionally occur through check payments and wire transfers. Because 74% of businesses have experienced check fraud and 40% experienced wire transfer fraud, organizations have focused their attention on protecting against these forms of attack — and the opponent has taken notice.
Tens of billions of Automated Clearing House (ACH) transactions are made every year. According to NACHA, the organization that oversees the ACH network, that number is growing. In Q1 of 2021, 7.1 billion ACH payments moved $17.3 trillion, an 11.2% increase over the same quarter in 2020. The rate at which ACH transactions occur, along with the fact that this form of payment has previously been considered low risk for fraud, is proving to be a fruitful focus for fraudsters.
In 2020, the Association for Financial Professionals’ reported that 33% of organizations experienced ACH debit fraud, and 22% experienced ACH credit fraud, a slight increase over 2019 findings. “As fraudsters move away from targeting checks and wires,” notes the AFP, “they are resorting to ACH transactions as vehicles for their scams.”
This shift in scammers’ focus, reveals their effort to avoid raising red flags and escape detection, by attempting to attack payment methods previously not considered to be high risk. It’s a strategic approach given that the AFP found that “nearly 1/3 of organizations indicated that they have not received advice from their banking partners about mitigating potential risks associated with same-day ACH credit and debit transactions.”
Don’t be an organization that’s caught off guard. Monitoring ACH payments is key to securing your company’s financial information. Carter Bank & Trust has tools to help you monitor payments efficiently.
Having the final power to accept or reject ACH payments before they post is the most effective means of protection against ACH fraud. Carter Bank & Trust offers this gatekeeper system with our ACH Positive Pay. Positive Pay gives a key decision-maker, such as the business owner or chief financial officer, the ability to review and approve ACH payments before they post.
Additionally, you can protect your business against fraud with ACH Blocks. Also known as an ACH Debit Block, this added layer of security gives you the ability to prohibit, or block, all ACH debits and/or credits from posting to your company accounts to prevent ACH fraud.
Carter Bank and Trust can help you plan your next move. If you’re concerned about your firm’s security protocols, we invite you to manage your financial systems here through Carter Bank & Trust. You’ll gain access to a suite of insights and controls that starts working intelligently together to protect your assets from day one.