Detecting unauthorized account transactions quickly is critical in preventing financial loss. But did you realize that the time limits for notifying your bank of fraudulent activity varies depending on the type of transaction, payment method and whether it’s a business or consumer account? If you don’t report the fraud or complete the necessary dispute forms within the allowable timeline, you could end up being responsible. This could lead to the available funds in your account being drained, resulting in a bunch of overdraft fees. Have a revolving line of credit tied to your checking account? That's at risk for fraud too! If you’re using an online banking system to originate ACH credit transactions and wire transfers, you’re at an even higher risk. Is your financial institution prepared to combat these risks and help educate you on how to protect your account?
The risk associated with electronic payments does not lie in the payment networks themselves. Banks that process these kinds of payments do a great job of securing access to the networks. Breakdowns most often occur when:
- A debit card number, expiration and security code are obtained by fraudster and used to make purchases or cash withdrawals
- A company initiates unauthorized ACH debits to accounts
- A fraudster compromises the login credentials of an online banking user (by installing malware to initiate fraudulent ACH or wire transfers
- A business email is compromised; workers with authority to initiate ACH or wire transfers receive an “urgent” email that appears to be from a supervisor, requesting a transfer of funds immediately
So, essentially, the highest threat comes from how account holders protect their debit card information, account information or computers. And that’s something that no bank – including yours – can combat. Banks are encouraged to implement layers of security, so that if one security layer fails, it can be compensated by another layer. The banks that have had the most success fighting cyber fraud are the ones that engage their customers when suspicious activity is detected. After all, only you can know with 100% certainty if you want a transaction to be paid or returned. To protect your accounts from fraudulent transactions, it’s important to stay educated on the various schemes out there and to be careful about opening attachments or clicking links in emails from someone you don’t know (and even sometimes those you do!). Protecting your computer is the best first step. Keep malware and anti-virus systems up-to-date. More importantly, work with a bank that actively educates you on risks and best practices, offering technology solutions that can help you identify and respond to suspicious activity quickly. You’ll probably have to pay a fee if they offer a multi-layered, convenient technology solution, because they’re paying a technology provider to deliver it. It’s worth it. If your bank offers you a reasonable solution and you don’t take it because you don’t want to pay for it, or you think it’s too much trouble to use, you’ll end up taking the loss if you become a victim.
Checking and savings accounts are at risk to all types of fraud. Fraudulent checks, unauthorized ACH debit transactions, fraudulent wires and debit card transactions… all of these can drain your account. But who has time to watch online banking 24/7? With consumer (non-business) accounts comes the luxury of extended dispute windows thanks to Regulation E. If your bank isn’t automating the monitoring process, though, disputing these types of fraud is very inconvenient and time-consuming. Meanwhile, access to your funds can become an issue. Businesses – large corporations and small mom-and-pops – are another story all together. Businesses are not protected by Regulation E, but instead fall under Article 4 of the UCC (UCC-4A) rules. The result? A very limited dispute window of approximately 48 hours to return certain types of transactions. Yep, just 48 hours! To protect your account, it’s important that your bank offers real-time, actionable alerts that allow you to quickly respond to suspected fraud activity. Ideally, before the funds even leave your account.
Talk to your bank. Express your desire to participate in your own account protection. Ask them what they offer to safeguard your account against unauthorized ACH withdrawals or debit card transactions. Can they alert you and allow you to make a decision on the transaction before it’s withdrawn from your account? And if not, can you have the disputed funds returned to your account the same day? If you are originating ACH credit entries or wire transfers through online banking, ask your bank what method of anomaly detection they use once the transactions are released from the online channel before they’re sent out to the respective networks. Can they alert you of the suspect transaction? Can you verify the destination of the transaction (not just the name or amount) is valid? Can verification be performed outside of the online channel, possibly by phone, in an automated fashion, quickly and efficiently? How is the verifier authenticated? Do they offer any type of biometric verification? Do the solutions they provide insure alerts are relevant, so you are only called to action if it’s important to you? Do they offer you a way to identify trusted companies, payment recipients or wire beneficiaries as transactions are being processed, to minimize future alerts or required actions? No? Maybe they should. But you won’t know if you don’t ask. find banks that provide solutions If you’re interested in protecting your account from unauthorized ACH debit withdrawals and automating the dispute resolution process, click here If you’re a business customer originating ACH credit entries and would like your transactions analyzed to ensure funds are going to the proper destination, click here If you’re initiating wire transfers through online banking and would like to add voice biometric technology to provide extra security, click here If you’re interested in alerts for debit card activity, click here
Did you know that electronic payments are more convenient, more cost-effective, and faster and safer than writing paper checks? That’s according to the annual fraud survey reported by the Association of Financial Professionals. The highest incident of fraud for corporate accounts has consistently occurred with paper checks. Of course, just about everyone uses debit cards these days to make point of sale purchases instead of cash or paper checks. But when it comes to making or taking electronic payments, few payment systems can rival the ACH network. ACH (automated clearing house) transactions, often referred to as direct debit and direct deposit, have evolved into the largest, safest and most efficient payment system in the world. More than $41 trillion is moved each year, basically replacing the use of paper checks. How do you know if you’re using the ACH network? Simple: if you’re providing a routing number and account number for either a recurring payment or one-time purchase (utility bills, gym memberships, online shopping, etc.), you’re most likely authorizing an ACH debit. If you’re sending money to employees or individuals through person-to-person transfers, it’s likely that if it isn’t a wire transfer, it’s an ACH transaction. Sending money via ACH is processed on the same day, making for faster settlement. In 2017, same-day ACH debits will become a reality. The $25,000 maximum limit per transaction allows more transactions to move through the low-cost ACH network versus the more expensive wire transfer method.