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Automated Clearing House fraud (ACH fraud)

ACH fraud is the theft of funds through the Automated Clearing House financial transaction network. The ACH network acts as the central clearing facility for all Electronic Fund Transfer (EFT) transactions in the United States, representing a crucial link in the national banking system. Payments linger in the ACH network awaiting clearance for their final banking destination.

Here are a few examples of ACH fraud:

  • The criminal accesses a commercial customer's credentials, generates an ACH file in the originator's name, and quickly withdraws funds before the victim discovers the fraud. 
  • The criminal accesses a retail customer's credentials and sets himself up as an automatic bill pay recipient. 
  • In an insider threat scenario, an employee of the target company or a bank modifies ACH files to steal money.
  • In a variation on check kiting -- a scam in which funds are juggled back and forth between bank accounts at separate banks -- a criminal takes advantage of the time lag in transactions.
  • In a spear phishing scam, an employee with authorization for ACH transactions receives an email that leads him to an infected site, which installs a keylogger to access authentication information. The thief can then impersonate the company's authorized representative and withdraw funds. 

To protect yourself from ACH fraud, the FBI recommends that you watch account balances closely and reconcile the account frequently, use strong passwords and change them often, restrict access to any computer used for ACH transactions, and ensure that firewalls and antivirus software are up-to-date. 

This was last updated in August 2012

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