Fraud keeps changing. As it does, participants in the payments system need to understand and adapt to emerging fraud scenarios and develop counterstrategies to help protect their customers and themselves.
Nacha’s previous risk management strategies for the ACH Network have focused on protecting consumers, organizations, and their account-holding financial institutions from fraud due to unauthorized debits that pull money from their accounts. Now, however, the most significant fraud threats to bank account holders involve fraud and scams that result in money being sent out of their accounts using credit payments, including ACH credits, wires, cards, and other instant and digital payments.
This new Risk Management Framework identifies current fraud threats that result in credit-push payments through the ACH Network and other payment rails, highlights significant challenges that credit-push fraud scenarios present, and identifies opportunities to improve fraud detection and prevention, and aid in the recovery of funds. As a new risk management strategy, the Framework is intended to bring the ACH Network and the broader payments community together to address an emerging and important area of need, and to provide an overarching direction for new initiatives, guidance, rules and industry tools.
While Nacha’s role in the payments industry is governance of the ACH Network, credit-push frauds are broader than ACH payments. The strategies, themes, and opportunities identified here are applicable to other payment systems and methods, and the payments industry should work together across different payment methods.
As the Framework demonstrates, a new way of thinking about fraud detection, prevention and recovery is needed, as is a cultural change in the industry about fraud information sharing. All participants in the payment system, whether the ACH Network or elsewhere, have roles to play in working together to combat fraud.