Michael Herd, Executive Vice President, ACH Network Administration, Nacha
Fraud is ubiquitous, from schemes such as business email compromise (BEC), for which the FBI reported $2.9 billion in losses in 2023, to check fraud, which has roared back even as the use of checks has dramatically declined.
A successful BEC or similar fraud results in a credit-push payment – a wire transfer, ACH credit, instant payment, etc. – being sent to a live account at a receiving financial institution. Newly adopted Nacha Rules will help address instances in which an ACH credit payment is used.
Under these new rules, all participants in the ACH Network (except consumers) will have a role to play in monitoring ACH payments for indications of these credit-push frauds, and in best efforts to recover funds after a successful fraud. For the first time under the Nacha Rules, receiving institutions will have defined requirements to monitor inbound ACH payments. As the institution housing the destination account, the receiving institution might be in the best position to identify facts and patterns that are indicative of credit-push frauds.
While Nacha Rules apply only to participation in the ACH Network, these principles and monitoring techniques could be applicable to other types of payments.
You can find complete information on these new Nacha Rules at https://www.nacha.org/newrules. This page also includes access to a complimentary recorded webinar by Nacha Rules experts.
Now, how can Nacha help with check fraud? Ironically, with a tool called the ACH Contact Registry.
All financial institutions that participate in the ACH Network are required to list ACH contact information in the registry. Many institutions also list contact information for other payment types. As of this writing, more than 3,500 institutions have listed contact information for check payments.
That means that the ACH Contact Registry is the industry’s single best source of contacts for check payments at counterparty institutions. Since you already participate in the registry for your ACH contacts, why not use it to list your check and other payment contacts, and use it to look up contacts at other institutions?
To access the ACH Contact Registry, go to https://www.nacha.org/nacha-risk-management-portal.
