Fraudulent ACH refers to unauthorised or deceptive electronic payments made through the Automated Clearing House (ACH) network. These transactions are typically initiated without the account holder’s consent or through manipulation of account credentials, payment instructions or business email compromise schemes.

Fraudulent ACH activity can involve stolen identities, synthetic identities, compromised online banking access, payroll diversion, vendor impersonation or account takeover. Because ACH payments clear quickly and at scale, they are a common target for fraudsters and organised crime groups.

Why Fraudulent ACH Matters In Financial Crime And Compliance

Fraudulent ACH activity creates financial, regulatory and reputational risk for banks, fintechs and payment service providers. Supervisory bodies emphasise the importance of fraud prevention controls, including guidance provided by the Consumer Financial Protection Bureau, which highlights the need for transparent processes and strong customer protections.

Financial institutions also reference operational expectations provided by the Federal Reserve, which outline risk management considerations for electronic payments.

Fraudulent ACH monitoring supports:

• Early identification of unauthorised transfers.

• Rapid response to account takeover and credential compromise.

• Stronger customer protection and dispute handling.

• Better alignment with AML and fraud‑risk governance.

Common Types Of Fraudulent ACH Activity

Fraudulent ACH schemes often fall into categories such as:

• Account takeover (ATO) - A criminal gains access to online banking and initiates ACH debits or credits.

• Business email compromise (BEC) - Fraudsters impersonate employees or vendors to redirect payments.

• Payroll diversion - Criminals reroute salary deposits to fraudulent accounts.

• Synthetic identity fraud - ACH transactions are made using identities created from fabricated and stolen information.

• Phishing‑based authorisation fraud - Victims unknowingly provide approval for fraudulent debits.

ACH Fraud Red Flags

Common indicators of fraudulent ACH activity include:

• Sudden changes in payroll instructions.

• ACH transfers to newly created or unverified accounts.

• Repeated small‑value test payments.

• Mismatched beneficiary names and account numbers.

• Unusual transaction timing or high‑velocity withdrawals.

Financial institutions often use insights from resources like the National Automated Clearing House Association to refine fraud detection rules and operational controls.

How Organisations Prevent And Detect Fraudulent ACH

Effective fraud prevention combines technology, processes and customer‑centric safeguards.

Common measures include:

• Multi‑factor authentication (MFA) for online banking access.

• Real‑time behavioural analytics to identify unusual payment patterns.

• Device fingerprinting to detect anomalies in customer sessions.

• Velocity and anomaly detection rules to flag suspicious movement.

• Automated sanctions and adverse media screening to evaluate counterparty risk.

• Out‑of‑band verification for sensitive payment changes.

• Strong reconciliation and exception‑handling processes.

These safeguards align with industry best practices referenced by the Europol Financial Intelligence programme, which highlights the link between fraud and organised criminal networks.

How Fraudulent ACH Monitoring Connects To Facctum Solutions

Fraudulent ACH oversight relies on accurate data, real‑time risk detection and structured decisioning workflows.

Facctum supports these requirements across its solutions:

• FacctList, available through the watchlist management solution, helps institutions maintain high‑quality, enriched lists used to evaluate counterparties and risk indicators.

• FacctView, delivered through the customer screening solution, supports sanctions, PEP and adverse media screening relevant to ACH risk.

• Transaction monitoring capabilities within Facctum’s platform help detect suspicious behaviour connected to fraudulent ACH patterns.

• Alert adjudication workflows assist analysts in investigating, escalating and resolving alerts involving potentially fraudulent payments.

This supports regulated industries such as AML for Banks, AML for Fintechs and AML for Payment Service Providers.