Sunday, August 31, 2008

ACH Fraud: The Bank Account That Sprang a Leak

Diana B. Henriques writes in The New York Times:

[What is at issue...] is called automated clearing house fraud, theft involving unauthorized electronic transfers through the automated networks of the circulatory systems that connect the world’s bank accounts.

When a consumer writes a check, the merchant that accepts it is entitled to have the specified amount taken from the customer’s bank account and sent electronically to the merchant’s account.

But once someone has certain routing numbers for a customer’s account, fraudulent transfers become possible unless the customer carefully scrutinizes all of the transactions on the monthly account statement.

If the consumer reports a clearly unauthorized transaction within 60 days, federal banking rules require the bank to cover the loss, Ms. Hillebrand said. If not, and if the bank informed the customer in advance about the 60-day deadline, the bank has no liability.

More here.

Hat-tip: /.


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