ACH - Rolling The Dice Or Investing In Prevention?
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Most banks and fraud experts agree that Automated Clearing House fraud (ACH fraud) results in large part due to the customer's failure to protect their data and then appropriately monitor and reconcile their account activity. Certainly, the customer can, and should do more to protect themselves against ACH fraud. Many of the steps needed to reduce a company's exposure to ACH fraud are not all that complex. For example, ensuring that employee passwords are changed frequently, as well as reconciling accounts (ideally on a daily basis) can go a long way to reducing ACH fraud risk.
Given the state of the economy, most companies are focused on survival, not building in layers of security for a fraud that may, or may not happen. Just like many types of fraud, until the probability of fraud losses resulting is sufficiently high enough, companies will continue to "avoid the bullet†that may be coming their way.
If customers are not feeling a sense of urgency, or are unable or unwilling to increase their defenses around ACH fraud, are banks filling the void? Well, the answer is "it depends". I recently visited ten job boards (monster, hotjobs, etc) and entered "check fraud" in the search terms. The list of results was often 3 to 4 pages long. I did the same for "ach fraud" as well as "wire fraud". The results were far less impressive and typically did not exceed 1 page, and included less than 5 jobs. Does this mean that ACH fraud is not a priority for banks? I am not sure, but the lack of jobs with ACH fraud as a component is certainly interesting. It could be that banks roll ACH fraud under check fraud and choose not to detail in a job description. Maybe, but that also infers that ACH is not "top of mind".
From my experience, "big banks" are well aware of the threat and have staff dedicated to ACH fraud detection. Mid sized banks are hit or miss. Some recognize the threat and have dedicated resources to combating ACH fraud. Others don't really know how to approach the problem and seem caught in a "no man's land" – the losses are large enough to justify concern, but not large enough relative to other loss types to justify action.
In either case, ACH fraud is a hot topic these days and one that Bank Fraud Forum has devoted significant coverage to. Below are some additional articles that I encourage you to read for more information if you are interested.
Does your bank have investigators dedicated to investigating ACH fraud? Are they tasked with both ACH and wire fraud? If the volume of ACH fraud continues to climb, can you easily re-task those investigators from check fraud? What tools do you use to detect ACH fraud? Is ACH fraud even on your bank's radar?