In light of recent news, and the publishing of Mr. Well’s Internet Fraud Case Book, (Check out Chapter 5), it would behoove us all to go back to the basics to examine the anatomy of an ACH fraud so that Jacksonville consumers and business can learn about this growing threat and begin to protect against theft.
What is an ACH?
ACH stands for Automated Clearing House transactions. These transactions are quickly replacing checks due to the rise of the internet and the need to move money more quickly. You probably have signed up for direct deposit for your paycheck and this is an ACH transaction. You may not know it but if you write a check in your local Jacksonville Wal-Mart, the paper check is not actually sent to your bank but is routed through the ACH networks.
What is ACH Fraud?
An ACH fraud occurs typically via unauthorized access to another person or business entity’s bank account. Additionally but not as common, ACH fraud can occur on a brand new account opened for sole purpose of funneling funds. These cases often involve identity theft as well as money laundering.
During an ACH fraud, the fraudster will typically gain access to an account and ACH the funds off to another bank account. The legitimate owner may not be aware of the transaction for a few days to weeks and by the time it is discovered it is often too late to recover the funds.
ACH Fraud Trends
ACH Fraud is on the rise. The FDIC has sent out alerts advising Financial Institutions to protect themselves and educate consumers against ACH fraud. According to this Bank Info Security article, The Financial Services Information Sharing and Analysis Center plans to publish advisories around October.
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