ACH Debit Fraud
ACH debit fraud occurs when a third party initiates an unauthorized electronic withdrawal from their victim’s account. All the fraudster needs is the account number and bank routing number, which are readily available on any check. Using a vendor’s online payment functionality, the fraudster enters the account number and bank routing number as his own, and pays his bill.
Because the ACH codes typically used for these types of payments categorize them as “consumer” transactions, the ACH Network allows a longer timeframe for returns of unauthorized debits, so these fraudulent transactions are often recovered. However, ACH debit still has the potential for significant losses.