Capterra Glossary
Automated Clearing House Fraud (ACH Fraud)
Automated clearing house fraud (ACH fraud) is the act of fraudulently obtaining funds through the ACH financial transaction network. The ACH is an electronic funds-transferring system that was established in the mid-1970s. ACH transfers account for payments made, deposits received, and other bank account transfers. ACH fraud occurs when scammers pose as a bank, employer, or billing company in order to gain the account information (account or routing number) of a bank user's financial account. Once the fraudster receives this information, they may take hold of a bank user’s account and set up automatic payments to themselves.
What Small and Midsize Businesses Need to Know About Automated Clearing House Fraud (ACH Fraud)
In order to prevent ACH fraud, small and midsize corporations should take steps to safeguard their business from ACH fraudsters. Treasury management tools such as ACH blocks, ACH filters, positive pay, and reverse positive pay can help small corporations ensure that they only relay their banking information to pre-approved vendors.
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