ACH Credit and Debit Transfers Statistics: Understanding the Rules and Risks

In recent years, there has been a significant increase in fraudulent activity targeting ACH (Automated Clearing House) credit and debit transfers. According to NACHA, the payments clearing house through which ACH transactions flow, 2020 was a banner year for ACH fraud, with an 8.2% increase in volume and a 10.8% increase in dollar value over 2019.

To combat this rising trend, NACHA has implemented stricter regulations to prevent fraudulent activity. One of the key requirements is account validation, which involves verifying the account number and routing information before processing transactions. This can be done through various methods, including:

1. Verification database: ACH Originators must use a verification database to validate the account number and ensure it exists.

2. Trial deposits: ACH Originators can send small trial deposits to the account holder's bank to verify that the account is valid.

3. Prenote transactions: ACH Originators can send prenote transactions, which are $0 transactions sent to the FI specified by the end user, to verify that the routing and account numbers work.

In addition to these methods, ACH Originators are required to use a 'commercially reasonable fraudulent transaction detection system' to screen WEB debits for fraud. This means that they must have a system in place to detect and prevent fraudulent transactions before they occur.

The Federal Trade Commission (FTC) has also reported a significant increase in fraud reports from consumers, with imposter scams remaining the most common type of fraud reported. In 2020 alone, the FTC received more than 2.2 million fraud reports from consumers.

It's not just consumers who are affected by ACH fraud. Businesses in various industries, such as telecommunications, media and entertainment, are also targeted by scammers. For example, a business may receive an email or phone call claiming to be from a legitimate company, asking for payment information to process a transaction.

To protect against these types of scams, businesses must be vigilant and take steps to verify the authenticity of transactions. This includes:

1. Verifying the account number and routing information before processing transactions.

2. Using a 'commercially reasonable fraudulent transaction detection system' to screen WEB debits for fraud.

3. Monitoring accounts regularly for suspicious activity.

By understanding the rules and risks associated with ACH credit and debit transfers, businesses can take steps to protect themselves against fraudulent activity and ensure that their transactions are secure and legitimate.

ACH credit and debit transfers statistics