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New Nacha rules strike at push-payment fraud

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Dive Brief:

  • Nacha, the national clearinghouse that manages electronic money movement, has approved new rules requiring fraud monitoring of ACH payments, according to a Monday press release
  • All parties involved in an ACH transfer, excluding consumers, will be required to monitor the transactions, the release said. The rules also empower the receiving bank to return a suspicious transaction without waiting for a request or customer claim.
  • The rules are meant to move ACH fraud monitoring from a good practice to a compliance requirement, Nacha Executive Vice President Michael Herd said in an interview Monday. “With respect to transaction monitoring for fraud, it would no longer be acceptable to do nothing,” he said.

Dive Insight:

Nacha is a nonprofit organization that governs, but does not operate the ACH Network, an account-to-account money transfer system overseen by The Federal Reserve and The Clearing House. There were 31.5 billion ACH Network payments made last year, valued at $80.1 trillion.

One type of scam Nacha is looking to prevent is a business email compromise scam, the release said. A BEC scam involves getting into a corporate email account to then conduct unauthorized transfers using payment methods such as ACH.

In the past, a victim of ACH payment fraud, along with the consumer’s bank, would need to reach out to the bank that received the funds and request a return, said Herd, who is responsible for administering the ACH network. “Time is of the essence because once payments are received into an account, the fraudsters will try to withdraw or move those funds on as quickly as they can,” Herd said.



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