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When it Comes to Fraud, ACH and Wire Transfers Can Be an Easy Target

Category: Articles

By Robert N. Gray, CPA 

Are you sure your organization is protected from credit card and wire fraud?  As a business owner, manager or executive director, you want to ensure that you’ve done everything you can to safeguard your organization.  

Automated Clearing House (ACH) payments and wire transfer activity can present potentially lucrative opportunities for fraud.  However, there are some basic safeguards to help protect your ACH and wire transfer transactions: 

  • Frequently monitor your electronic account activity, and do so carefully. 
  • In addition to reconciling accounts regularly, utilize ACH blocks and filters designed to protect against unauthorized electronic ACH transactions. Enabled users can authorize specific ACH debits or block certain ACH debits. 
  • Employ segregation of duties for your ACH and wire transfer functions (i.e., one individual in your organization should not both initiate and approve these transactions) to maintain a higher level of security. 
  • The individuals initiating the transaction and approving the transactions should both verify all payees and other transaction information for accuracy before ACH and/or wire transfer transactions are processed. 
  • Identify questionable items, confirm which may be suspicious, and report them to your bank immediately. 
  • Designate a computer to be used by properly-authorized individuals when accessing your bank’s online banking to conduct ACH and wire transfer functions.  Prohibit all other internet traffic and email access on the designated computer to reduce the vulnerability of attacks. 
  • Limit the number of online banking users that can initiate and/or approve ACH and wire transfer transactions, ensure each online banking user has a unique ID and password to enter the system, and never share access credentials. 

No one is ever 100% safe from fraud.  However, following the simple safeguards above will help provide you with a higher level of protection than you might have if you don’t follow the safeguards. 

Robert N. Gray, CPA, is a shareholder in Rubino & Company, Chartered. Mr. Gray oversees the accounting and auditing practice for the firm and serves as the firm’s Director of Quality Control.  He has over 40 years of public accounting experience and serves clients in a wide range of industries throughout the mid-Atlantic region. 

   

 

 

 

 

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