In the banking world, businesses do not enjoy the same Regulation E protections on electronic transactions as consumers. If you’re a business account holder, it’s up to you to detect fraudulent transaction activity quickly (generally within 48 hours) and notify your bank immediately.
While tools like ACH debit blocks can eliminate concerns about fraudulent ACH debits posting to your account, the reality is that you’re further exposed to more risk with paper checks. ACH debit filters have been effective, but the extensive setup process makes them an unattractive option.
Fortunately, ACH positive pay technology has advanced, allowing you to specify who should be alerted and how they should be alerted (email or text message) when ACH debits arrive. These systems make it easy for you to add trusted companies to your “approved list/ACH filter” when the transaction is presented. This allows business account holders like you to set additional controls to pre-authorize future transactions without requiring your attention.
The same type of ACH positive pay solutions exist to ensure that each ACH credit transaction you originate goes to a destination (routing/account number combination) that you’ve pre-approved. Out-of-band alerts and verification methods ensure that transactions are being made by you and not a fraudster.
Wire transfers require more advanced protection because of how quickly those transactions are processed. An account can be hit very hard with a single high-dollar wire transfer or multiple smaller transfers before you’re even aware the funds have been sent. Another tricky scenario occurs when your business email has been compromised. Call backs performed by your bank are useless, since the person who requested the wire thinks the transaction is legitimate. not realizing that the instructions were from a fraudster and not the CEO, CFO, etc.
Interactive voice response systems and the use of voice recognition technology can automate the verification process and provide an even higher level of authentication. Is your bank doing call-back verification? Ask if they’ve considered automating the process, and request that they systematically alert you and allow you to make one call to verify the transaction and be done. The technology exists; it’s just a matter of you asking for it from your bank.
Check fraud is more rampant than electronic transaction fraud, but it can be controlled with the use of check positive pay solutions. Ask your financial institution how you can protect your account using check positive pay, with or without the requirement of issuance file delivery.