Independent Banker - May 2024 - 30

PORTFOLIO CHECKS & BALANCES
New Nacha rules strengthen
the ACH system's security
Credit-push fraud in the ACH system has spurred the introduction of new rules from Nacha.
With ICBA's support, these new rules have changed how receiving institutions can address
such fraud. By Kari Mitchum
ecently, the banking industry has
taken further initiative to tackle
a concerning problem: Credit-push
fraud. Also called authorized push
payment (APP) fraud, credit-push
fraud is when a consumer authorizes
a payment but may have been
fraudulently induced to do so.
In March 2024, Nacha-the
organization that governs the ACH
system-promulgated new rules that
address some key factors behind
credit-push fraud and will help
community banks combat it.
ICBA supports these rules, as they
update the existing procedures for
R
combating credit-push fraud and
clarify the roles of both the sending
institution (ODFI) and the receiving
institution (RDFI). The rules also
outline the responsibilities of the
third parties and originators in the
ACH system: the payroll providers,
billers and service providers-all
the nonbank supporters that work
together so consumers can receive
direct deposit paychecks and make
online bill payments.
The extent of the problem
Here's the issue: Even though this
is called " fraud, " credit-push fraud
payments are fully authorized by
the consumer and not made under
duress. The money gets " pushed "
from a victim's bank account to the
account of a fraudster, and the ACH
system, which moves more money
than any other banking system, is a
key target. The technology behind the
ACH system is secure, meaning this
fraud requires human interference,
usually in the form of a scam.
One of the most common
credit-push frauds is business email
compromise (BEC). This occurs
when a scammer uses email to trick
someone into sending them money or
30 // ICBA Independent Banker // May 2024
Illustration by N ON NE ON/Adobe

Independent Banker - May 2024

Table of Contents for the Digital Edition of Independent Banker - May 2024

Contents
Independent Banker - May 2024 - Cover1
Independent Banker - May 2024 - Cover2
Independent Banker - May 2024 - Contents
Independent Banker - May 2024 - 2
Independent Banker - May 2024 - 3
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