Should the new adage be that the more something is used, the more likely it is to be misused? That certainly is the case with ACH, or Automated Clearing House, transactions. Long a virtually fraud-free exclusive banking club, the ACH is paying a price for popular programs that now permit people to authorize ACH debits to personal or corporate accounts over the phone and allow consumer checks to be converted into ACH debits at either the point of sale or retail lockbox. In the process, check fraud has been converted into ACH fraud. "It's a lot easier to get a file into the ACH than it used to be," notes Anthony J. Carfang, principal of Chicago-based Treasury Strategies Inc. "As barriers have come down, volume has gone up, and so have errors and fraud."

Dangers posed by checks

The most sophisticated attacks are coming from telemarketers who violate ACH rules by taking checking account information and creating ACH debits during outbound calls. Only calls originated by the payer are allowed to generate ACH debits. These telemarketers tend to target consumers almost exclusively, and not surprisingly, the statistics indicate that consumer accounts are far more likely to be hit.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.