Check Twice for ACH & Wire Fraud: What You Need to Know and How to Protect Your Business - Bank of Central Florida

Guest Blog Post

Today’s financial world is so fast paced, and small business owners need the ability to move money efficiently and securely. Moving funds through ACH and wire transfers are two types of payment methods. However, they are susceptible to fraudulent threats.
 
Let’s dive deeper into how you can be more vigilant against ACH And wire fraud.
The Difference Between ACH and Wire. While ACH and wire transfers are a form of electronic payments that work similarly, there are key differences in the way they function.
 
Wire transfers are direct transfers initiated by a sender that moves money between two financial institutions. Most wire transfers are fulfilled in one business day, so it can be more efficient if money needs to be moved quickly. The monetary amount of a wire transfer can be up to millions of dollars, but it is a less frequently used type of transaction. Wire transfers costs vary depending on if the money is being sent domestically or internationally. They also can be almost impossible to reverse if an error arises.
 
Oppositely, an ACH transfer, or Automated Clearing House transfer, is easier to reverse if there is an error. A single transfer is used for smaller monetary amounts without a cap amount, and they are typically received within 2 business days depending on the effective date. ACH transfers are very inexpensive, and each transfer also can be initiated by a sender or a receiver. They tend to be used more frequently due to the price in comparison to the cost of wire transfers.
 
How does ACH and Wire Fraud Occur?
ACH and wire fraud occurs when a fraudster initiates a digital transfer from a bank account without a person’s permission. Some of the most common examples of ACH and wire fraud include:

1. Business Email Compromise: A fraudster impersonates a vendor or an executive to encourage an employee to send a payment.
2. Account Takeover: Fraudsters obtain accounts through malware, phishing, or other theft methods to initiate unauthorized transfers.
3. Fake Check Scams: A fraudster impersonates a company or an employee, so they can send fake checks to a person or request a check be redirected from direct deposit.

Fraud is always a potential threat, and it’s important to stay aware of the different types of fraudulent activities, so an entrepreneur can better protect their business.
 
How can you protect yourself against ACH and Wire Fraud?
To be proactive against ACH and wire fraud, here are several common practices to help protect your accounts.

Examine your transaction activity: Monitor and review your payment history for suspicious transactions.
Educate yourself: Learn about current fraudulent threat trends and the best practices to manage money diligently.
Evaluate before sending: Verify where the money is being sent and call your recipient when necessary.
Establish Payment Approval Controls: Add alerts within online banking to ensure dual authorization or additional safety measures for different types of transactions.

How can Bank of Central Florida help?
One of the most helpful ways to protect your assets against fraud is by having the right team to support and educate you. Bank of Central Florida’s Relationship Management team is here to help you feel prepared from every direction.

If you believe you are a victim of ACH or wire fraud, contact your relationship manager for assistance.

For more information on business fraud protection, visit our resources page on the home page of our website.

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