ACH Fraud is fraud involving the Automated Clearing House. ACH fraud occurs when there is an unauthorized transfer of funds in a bank account. It is becoming an increasingly popular way for criminals to siphon funds out of unsuspecting victims' accounts.
Criminals only need a checking account number and a bank routing number to effectively steal money via ACH fraud. The most common way this information is obtained is through a phishing scam.
What is phishing?
Phishing is a cyber-based crime in which a hacker targets a victim via email, telephone, or text. The fraudster poses as a legitimate business and lures the victim into providing sensitive data, such as passwords or bank account information.
The information provided by the victim during the initial attack can then be used by the criminal to access bank accounts, resulting in financial loss.
Over the years, phishing has become more and more sophisticated. Hackers can oftentimes gain access to information by installing malicious software on a computer instead of having to lure information out of a victim. Malicious software, or malware, can be sent via email attachments or infected URLs.
How Common is ACH Fraud?
ACH remains a very safe way to directly move funds. In fact, in the United States, payment fraud remains low. According to NACHA, ACH payments have the lowest fraud rate by value, a new Federal Reserve study found. Only approximately eight cents for every $10,000 can be attributed to ACH fraud.
Who is at Risk of ACH Fraud?
In short, any bank account can be considered “at-risk” for ACH fraud. It is important that users protect their banking account number and routing number, along with any sensitive information to access passwords.
According to the Internet Crime Complaint Center (IC3), "FBI analysis has found in most cases, the victims' accounts are held at local community banks and credit unions… The bank account holders are often small- to medium-sized businesses across the United States, in addition to court systems, school districts, and other public institutions."
Small and mid-sized businesses are frequently targeted as they don’t always have robust systems in place to thwart phishing attempts. In a typical scenario, an employee receives a phishing email that contains either an infected file or a link to an infected website. Once the user opens the attachment or navigates to the infected URL, malware is installed on the user’s computer that allows the hacker access to banking credentials used on the computer.
Consider EFX for your ACH Processing Needs
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