6 Tips For Spotting ACH Fraud


An Automated Clearing House (ACH) is an electronic network that uses computer technology to perform automatic transactions such as direct debits and credit transfers. Due to its convenience, many financial institutions are now adapting ACH, which means there’s a possibility that you’re using the system without you knowing. Although there are several advantages to this, it’s slowly catching the attention of criminals and scammers, leading to the creation of numerous ACH fraud schemes.

But what is ACH fraud? To put simply, this fraud occurs when a fraudster obtains your account number and bank routing number.

Once they have these two pieces of information, they can siphon money out of your account. Alas, fraudsters may use all kinds of schemes to obtain the said information, and it can be difficult to distinguish a genuine financial institution from one that’s pulling off a fraud. On that note, here are some signs that you’re a target of ACH fraud: 

1. Emails Prompting A Download 

Rarely would you encounter a genuine email that prompts you to download a program, so if you happen to receive one, make sure you do your research regarding the sender and their domain address. 

Fraudsters often send emails to persuade people to download a program. Once the program is installed, the criminals would steal all your banking information once you make a transaction from thereon. That’s also why you must make sure you have antivirus and malware software on your computer to automatically combat these malicious programs. 

2. Breached Financial Service Provider 

Even with genuine financial service providers, you can’t guarantee that you’re safe from ACH frauds. There are cases where these service providers are breached, which would mean you and other customers’ numbers are compromised. This would be the worst-case scenario for a financial institution. One way to spot if this is currently happening to your service provider is by simply calling them regularly if there’s a problem.

If there is, it’s best to lock your account in the meantime to prevent the criminals from taking money away from your account. It’s also best to opt for a service provider that offers secure ACH payments to minimize the possibility of these breaches. 

3. Unauthorized Transactions Made With Your Identity 

Criminals may use your identity to contact your service provider. They’d impersonate you and ask for a change in your banking account. They might also make an excuse that you forgot your banking account or password. If your provider is somehow tricked, they’d either change your password or simply ask for the banking number. If they have either of these, they’ll be able to infiltrate your account and make transactions to take money from your account. 

One way to prevent this is by looking for a service provider that only receives calls from the number you specified when you opted for them. That way, fraudsters won’t have any way of getting your information from the financial institution, even with a perfectly fabricated identity. 

4. Financial Institutions With Unknown Background

Sometimes, criminals may go out of their way to create fake financial institutions. This is the most difficult scheme to spot, especially since the financial institution you’re supposed to trust is what’s tricking you. However, you can easily distinguish a genuine service provider from a fake one by looking into their origins and background. 

Simply searching for them online should yield some results that can conclude whether it’s real or not. Take note that there may also be some reviews, but these are typically made by the criminals themselves or a bot that they paid for. 

5. Reviews Regarding Frauds 

You should also remember that financial institutions may be regarded as frauds without being one. This happens when an employee within the institution has access to customer information and is using it to siphon money from the customers. 

Although your service provider would have difficulty finding this individual, you can easily spot this type of ACH fraud by looking at the reviews of the institution. If there are reviews regarding frauds, chances are some customers have already suffered from the insider’s attack. Your best bet would be to steer away from these institutions. 

6. Stolen Debit Card 

Of course, you shouldn’t forget about one of the most primitive ways to forcefully take money from an account—through stolen debit cards. If your debit card is stolen, the criminal would already have everything they need to pull off an ACH fraud. That’s why it’s crucial to deactivate your account immediately by calling your service provider before the criminals make a transaction.

Final Words 

Criminals are coming up with new ways to pull off ACH frauds, which means you must also figure out how to spot these schemes. Otherwise, they’ll slowly overwhelm you, and you might no longer be able to distinguish genuine ACH transfers from frauds. With this guide, you should be able to spot ACH frauds that come your way.