What is ACH Fraud and How to Protect Yourself

April 10, 2023

Key Takeaways:

  • ACH fraud is a type of fraud that impacts ACH payments, which are electronic transfers of money from one bank account to another. This type of fraud can have a significant impact on people who use automatic payments to pay their bills.
  • Scammers use stolen data, phishing scams, or dark web leaks to commit ACH fraud.
  • The best way to avoid ACH scams is to never click on links, always get verbal confirmation, and monitor your accounts daily.

ACH fraud is a type of fraud affecting the Automated Clearing House (ACH) network. Customers often use ACH to make monthly auto draft payments to pay mortgages, utilities, vendors, and other monthly expenses.
Due to the network’s popularity, scammers have found ways to take advantage of the ACH network by stealing personal information and gaining unauthorized access to accounts.

Scammers can take control of an ACH payment by using phishing emails or malware viruses to steal personal information. Once they have access to a person’s routing and account number, they can use that information to transfer funds out of the account.

ACH fraud is a severe problem that is on the rise. In 2021, ACH fraud accounted for 37% of all fraudulent activity.

Unfortunately, it is hard to know how many people are affected because many victims may not even realize they have been scammed. Be vigilant and protect your personal information to prevent becoming a victim of ACH fraud.

How ACH Fraud Happens

  1. Scammers steal someone’s data (routing and account numbers), use it to generate an ACH payment, and withdraw funds or set up auto-pay to their account.
  2. Information being leaked on the Dark Web.
  3. A phishing scam where scammers pose as a financial institution to get customers to visit a fake site and then steal their information.

The best way to prevent ACH fraud is to review your account activity regularly. Always verbally authenticate requests to change payment information. Never click on links or open attachments when receiving an email or text.

How to Protect Yourself from Fraud

To prevent ACH fraud, it is important to take some basic security measures.

  1. Use unique and strong passwords for all of your accounts, and avoid using the same password for multiple sites. This will make it harder for scammers to guess your password and gain access to your funds.
  2. Set up alerts on your debit or credit card to notify you when it is used or when money leaves your account. This will help you spot any suspicious activity and act right away.
  3. Set up Fraud alert texts through your bank. This way, you will receive a text message whenever there is a suspicious transaction on your account.
  4. Set up two factor authentication for your accounts is also a good idea. Before entering your password, you must provide another form of identification, such as a code sent to your phone, before accessing your account. This adds an extra layer of security and makes it harder for scammers to access your accounts.

By taking these simple steps, you can help protect yourself from ACH fraud and keep your accounts safe and secure.

You Are Not Alone

Texas Regional Bank has a dedicated fraud prevention team whose sole job is to monitor all banking processes, which includes ACH transactions. Our fraud prevention team uses cutting edge software to detect fraudulent behavior and stop fraud before it happens. In addition to our software, every branch employee is well-trained to try and identify fraudulent activity.

Final Thoughts

Since the start of COVID-19, fraud has been on the rise. That is why it is crucial to be proactive and protect yourself from fraud. Newly released FTC data shows that consumers reported losing more than $5.8 billion to fraud in 2021, an increase of more than 70% percent over the previous year.

If you bank at a community bank like Texas Regional Bank, you can take your protection further by setting up an appointment with your banker. They can help you review all of your options to protect yourself from scammers.

By being proactive and taking these steps, you can help protect yourself from fraud and keep your accounts safe and secure.

For more information or national fraud prevention articles, please visit Security Archives – Texas Regional Bank.

Texas Regional Bank

Texas Regional Bank is a privately owned institution that was founded in South Texas with the goal to bring a locally-owned, relationship style bank back to the communities we serve. TRB is committed to building a relationship with our customers by providing exceptional customer service, financial products, and mobile and online banking.