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ACH Fraud Investigations and Mitigation

Our business customer says they have proof that another business fraudulently debited the customer’s account multiple times over the past 2 months via ACH CCD, then disappeared. Since they can’t get their money back from the other business, the customer wants the bank to return the transactions. Can we return the transactions with our customer’s “evidence” of fraud?

For an R29, the entry must be returned within 2 business days of settlement. Anything beyond is too late for a return unless you have permission from the ODFI for a late return. Be careful of what you promise the customer because you may not be able to return or recover this for them.
Liability is going to come down to 2 things: 1. State law (UCC4A) and your contract with the customer (Be mindful of your Choice of Law - Timeframes for reporting & liability vary by state.). And of course, you can elect to write it off and reimburse the customer as one bank did in early 2018 when the business lost $50,000 in fraudulent debits spanning several months, then took to social media because they felt the bank should have done more to protect the account.
Learn more about Rayleen Pirnie’s webinar
ACH Fraud Investigations and Mitigation

First published on 07/21/2019

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