In a recent column I mentioned a fraudulent transfer of funds from one of our bank accounts. The bank worked with us quickly to resolve it because the account in question is one we use a lot. Temporarily, because of the size of the fraud, that account was useless to us. Fact is this type of fraud can affect anyone. Chances are you’ve seen ACH on your own bank statement. There’s a good reason—the Automated Clearing House Network moves trillions of dollars each year. For many of us, fraud is rare, but I had no idea about specifics of these transfers until we experienced it ourselves.
If you move money electronically, it’s likely you have a relationship with ACH. It’s also likely that at times, you’ll have to figure out what you’ve been charged for. Until the fraud happened, charges and deposits into our accounts were legit as far as I could tell. Now I keep all receipts for electronic transfers of any kind, even if it’s just a gas pump receipt.
I’ve often wondered why banks accept charges without identifying information. I’ve seen a debit at times that just lists the city and the amount at first, but then when the debit goes through, more information is usually given.
It doesn’t matter if you’re careful with your accounts. Technology changes so rapidly these days even the most careful person can experience fraud. Although we’re often told to change our passwords frequently, many people don’t do that until an account is compromised. It’s smart to make passwords as complicated as you can, but even that won’t guarantee you won’t be a target.
In 2018 some companies called for reform of this process, at the banking level:
“This is a problem that has been well-known by the banking industry and NACHA for years. After all, the legislation allowing for digital checks was passed in 2004. My company banks with JPMorgan Chase & Co., and I am certainly grateful that the bank refunded us the stolen money, as it should. But equally I was told by a JPMorgan Chase employee that the bank simply writes off such instances of fraud, which are increasingly common. At a bank that generated more than $4.2 billion of net income last quarter, maybe that writeoff doesn’t amount to much, but it is an economic loss all the same.”
I didn’t realize this until I researched it, but fraud can tie up your funds for quite some time. After much urging and hours on the phone, our bank acted quickly so that we could use that account again. Federal law, however, does not exactly work in our favor on this matter.
Dispute laws enable a contested case to drag out while the bank investigates. It’s not a comforting thought.
If you work in the public eye, if you have a Paypal or similar type account, if you receive or dispense automatic payments, it’s a good idea to watch your bank account and follow that advice about changing your passwords frequently.
It’s also a good idea to contact your congressman and ask that the dispute process be reformed. Right now, the length of time that process can take works against you, not the fraudster.
(Kay B. Day/March 26, 2019)