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ACH Fraud

ACH Fraud

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What is ACH payment fraud?

ACH (Automated Clearing House) payment fraud is a type of fraud that involves the unauthorized withdrawal of funds from a bank account using ACH transactions. This type of fraud can occur when a scammer gains access to a victim's bank account information and initiates unauthorized ACH transactions.

How does ACH payment fraud occur?

ACH payment fraud can occur in a number of ways, including:
  • Phishing Scams: Scammers may use phishing emails or text messages to trick victims into revealing their bank account information, which can then be used to initiate unauthorized ACH transactions.
  • Malware: Scammers may use malware to gain access to a victim's bank account information and initiate unauthorized ACH transactions.
  • Social Engineering: Scammers may use social engineering tactics to trick victims into revealing their bank account information, such as by posing as a legitimate business or organization and requesting payment via ACH transfer.
  • Phishing: Hackers send out emails or text messages that appear to be from a legitimate source such as a bank or financial institution, asking recipients to click on a link and provide personal information or login credentials.
  • Overpayment Fraud: Criminals overpay for goods or services and then request a refund through an ACH transfer.
  • Business Email Compromise (BEC): Criminals use social engineering tactics to compromise email accounts of individuals or businesses and use them to initiate fraudulent ACH transfers.
  • ACH Mule Scams: Criminals recruit individuals to receive fraudulent ACH transfers in their bank accounts and then transfer the funds to the criminal’s account.
  • Payroll Fraud: Employees or payroll administrators initiate fraudulent ACH transfers for unauthorized or fictitious employees.
  • Vendor Fraud: Vendors or suppliers initiate fraudulent ACH transfers for goods or services that were not provided.
  • Investment Fraud: Criminals promise high returns on investments and then transfer funds through ACH transfers without delivering on their promise.
  • Loan Fraud: Criminals offer loans with low interest rates and favorable terms, and then initiate ACH transfers without providing the promised loan.
  • Crypto Investment Scams: Criminals promise high returns on cryptocurrency investments and then initiate fraudulent ACH transfers without delivering on their promise.
  • Check Fraud: Criminals deposit fraudulent checks into bank accounts and then initiate ACH transfers before the checks are discovered to be fraudulent.
  • Remote Access Scams: Criminals convince victims to grant them remote access to their computers and then steal personal information or initiate fraudulent ACH transfers.
  • low-interest Fake Debt Collection: Criminals impersonate debt collectors and request payment for debts that do not exist or have already been paid, often through ACH transfers.
  • Auction Scams: Criminals use fake auction websites to sell goods and request payment through ACH transfers, but never deliver the goods.
  • Job Scams: Criminals pose as employers and request payment for job applications, training or equipment through ACH promises, often for fake or nonexistent jobs.
  • Romance Scams: Criminals create fake online personas and use them to gain the trust of individuals, often leading to requests for money through ACH transfers.
  • Tech Support Scams: Criminals pose as tech support representatives and request payment for services through ACH transfers, often for fake or unnecessary services.
  • Rental Scams: Criminals pose as landlords or rental agents and request payments for rent or security deposits through ACH transfers, even for properties that do not exist.
  • Authority Scams: Criminals impersonate government agencies or law enforcement officials and use fear tactics to convince victims to transfer money through ACH transfers.
  • Charity Scams: Criminals impersonate legitimate charities and solicit donations through ACH transfers.
  • Lottery or Prize Scams: Criminals ask victims to pay fees or taxes to claim winnings from a lottery or prize, and then initiate fraudulent ACH transfers.
  • Advance Fee Fraud: Criminals request payment in advance for goods or services and then fail to deliver on their promise.
  • Payment Reversal Fraud: Criminals initiate ACH transfers and then reverse the payment after the funds have been received.
  • Unauthorized Debits: Criminals initiate ACH debits without the account owner’s authorization or knowledge.
  • Account Takeover: Criminals obtain login credentials for bank accounts through various means such as phishing, keylogging, or social engineering, and use them to initiate fraudulent ACH transfers.

How to stay safe from ACH payment fraud:

  • Remain vigilant: Be cautious of emails or text messages that request your bank account information or payment via ACH transfer. Legitimate businesses and organizations will never ask for this information in an unsolicited email or text message.
  • Create good habits: Regularly monitor your bank account and credit card statements for unauthorized transactions and report any suspicious activity to your bank immediately.
  • Be skeptical: Be cautious of requests for payment via ACH transfer from unknown parties, especially if the request is urgent or seems too good to be true.
  • Add strong security: Use strong, unique passwords for your bank account and other online accounts to prevent unauthorized access.  Consider using two-factor authentication for your bank account to add an extra layer of security.
  • Verify all ACH transactions: Always review your bank and credit card statements carefully and verify that all ACH transactions are legitimate. Contact your bank immediately if you notice any unauthorized transactions.
  • Be cautious of unusual requests: Be cautious of unusual requests for ACH payments, especially if they come from unknown parties. Fraudsters may impersonate a known contact or vendor to request payment, so be sure to verify the request before proceeding.
  • Educate yourself on ACH fraud: Learn about the latest ACH fraud schemes and tactics used by scammers, such as fake invoicing, vendor impersonation, and account takeover. Stay up to date on the latest fraud alerts from your bank and other financial institutions.
  • Secure your devices: Keep your computer and mobile devices secure with strong passwords and up-to-date security software. Avoid accessing sensitive information or conducting financial transactions on public Wi-Fi networks.
  • Use a trusted payment gateway: If you operate a business that accepts ACH payments, use a trusted payment gateway that provides fraud detection and prevention tools, such as transaction monitoring and alerts for suspicious activity.
  • Limit access to your bank account: Avoid sharing your bank account login credentials with anyone and limit the number of individuals who have access to your account.
  • Report suspicious activity: If you suspect that you are a victim of ACH fraud, report the activity to your bank immediately and file a complaint with the FBI's Internet Crime Complaint Center (IC3).
It's important to be vigilant and cautious when making financial transactions online and to verify the legitimacy of any requests for money before transferring funds.  By following these tips, you can help protect yourself from ACH payment fraud and keep your bank account secure.



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