Thieves don’t discriminate when it comes to company size or location. You might think northcentral Wisconsin businesses are free from attempted fraud. Think again. Many local companies have been targeted by thieves, some losing hundreds of thousands of dollars. The attacks range from employee theft of money and merchandise to cyber attacks by criminals in the United States and foreign countries.
Criminals have stepped up attempts to perpetrate fraud against companies through the Automated Clearing House Network (ACH), which is used by banks, credit unions, and businesses to handle direct deposits, bill payments, and cash transfers. ACH provides the ability for businesses to handle financial transactions electronically, speeding up both payments and deposits.
A central Wisconsin company had its computer system compromised. A fraudulent ACH file was initiated to move funds to various bank accounts throughout the United States. By the time the company discovered the fraud and notified their bank, it was too late. It had been over 24 hours since the file was initiated and there was little that could be done to recover the funds. The company lost more than $250,000 due to the fraudulent transactions.
How ACH fraud happens
ACH fraud, unfortunately, is easy to execute. The only thing a criminal would need to electronically debit your account would be the bank routing number and your business account number. The criminal could create an electronic file through the ACH Network debiting your account. If this transaction is not caught within 24 hours, it may not be able to be reversed.
More complex ACH fraud happens when criminals get you to open an email with a virus attached. The virus logs your keystrokes, looking for your usernames and passwords of your internet banking. Allowing them to access your account numbers and enabling them to transfer funds out of your business account.
What you can do
Peoples State Bank offers several options that businesses can use to help identify fraud more quickly, so losses are less.
A block is set to automatically stop all ACH debits out of your business account. No intervention is necessary once the service is set up.
A filter will allow only authorized ACH transactions to post to your account while excluding all others.
Positive Pay service is the most effective way to detect and minimize monetary losses associated with check fraud. Your business sends an electronic file of the issued checks that you’ve written. Peoples will only pay the items that match the criteria from the uploaded file.
Online and mobile alerts can be set to notify you of unusual activity in your accounts that may indicate account compromise. The cost of these services is minimal compared to what your business could lose due to fraud.