When it comes to your business, having procedures and tools in place to protect against fraud is always important, especially during the difficult times we’re experiencing now. Even before the pandemic, being mindful of your exposure was imperative. Considering our new way of doing business, fraud is on the rise and additional measures are being taken to protect the payments process, particularly pertaining to ACH transactions. The Association of Financial Professionals (AFP) 2020 Payments Fraud and Control Survey Report shared that of their respondents:
If you would like to learn more about the AFP 2020 Payments Fraud and Control Survey findings, visit our 2020 AFP Payments Fraud and Control Survey Report Summary.
ACH FRAUD VIA EMAIL
When compared to the previous year, ACH Credit fraud increased 2% and ACH Debit fraud remained unchanged. This is alarming as we think about the rise of ACH fraud incidences via Business Email Compromise (BEC), which is a scam targeting company email accounts to fraudulently transfer unauthorized funds. In the AFP’s report, 75% of organizations were impacted by BEC.
ADDITIONAL RISKS WITH SAME DAY ACH
Same day payments, regardless of the method, are beneficial for any business. However, as ACH fraud continues to rise, so does the need for companies to be more cognizant of interventions to lessen the risks. While some companies are prepared with mitigation plans, the study found the vast majority are not:
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USING CONTROLS TO FIGHT ACH DEBIT FRAUD
With one-third of businesses being victims of ACH Debit fraud, the need to have controls in place is evident. The more proactive you can be to protect your company, the less at risk you are of being a victim, much less a target. Respondents shared use of the following tools and procedures:
IMPLEMENTATION AND VALIDATION OF FRAUD CONTROLS
With guidance on best practices and implementing the right tools, businesses can limit their exposure to ACH fraud. Just as important though, is continuous validation that the controls in place are working appropriately. Although some may feel this process might be difficult, other organizations shared differently:
Until now, ACH has not been considered a high-risk payment method because fraudsters have been so focused on targeting checks and wires. While you cannot eliminate the risk entirely, you can certainly take precautions to protect your business. Especially with the ongoing COVID-19 pandemic, extra peace of mind can be helpful. It’s true that ACH transactions are quick and easy; however, the possibility of financial loss because of it is clear. There are tools and resources available to ensure financial loss doesn’t happen – just don’t wait until it’s too late.
Association for Financial Professionals: 2020 Payments Fraud and Control Survey Report
2020 AFP Payments Fraud and Control Survey Report Summary
As with all serious financial topics or decisions, be sure to consult with a trusted financial advisor beforehand. The content here is for educational purposes only, and is not meant to serve as any sort of advice or endorsement.