ACH Payment Fraud Prevention & Risk Management Tools

Checks and ACH transactions continue to be valid forms of payment today. These payment methods, however, can be risky to accept if you do not take the proper measures to safeguard your business. You can make a profit and prevent fraud by utilizing these risk management tools for accepting electronic checks and ACH payments.

Get to Know Your Customers

One of the simplest yet most proactive measures you can take to prevent check and ACH fraud involves getting to know your customers. When you establish a cordial if not friendly relationship with your customers, you gain knowledge that you need to recoup your costs if they ever take advantage of you.

You also may establish a trust that makes it less likely that your customers will attempt to defraud you and your business. Even so, you may find it handy to learn information about each client such as their:

• Name
• Business or personal address
• Contact phone number
• Taxpayer ID
• Website address

As much as you may be eager to trust your clients to be upfront and honest with you when remitting check payments, you also may find it prudent to do a background check on them and to find out what you can about each customer’s payment history with other businesses. Discovering incidences of check or ACH fraud with other companies in the local market and elsewhere could help you avoid the same fate.

Know Your Third-Party Payment Processor’s Clients

Anytime you decide to use a third-party payment processor, you should make it a point to learn what you can about that processor’s own clientele. Some of the information that can help you safeguard your business when accepting check payments include:

• The clients that utilize the processor’s services.
• The clients’ business names, addresses, websites, etc.
• The clients’ due diligence procedures.
• Any nested third-party payment processors utilized by both the initial payment processor or its clients.

Check fraud can impact your business, not so much through the actions of your customers, but the actions of your customers’ own clients. You can stop fraud before it reaches your company by learning what you can about your payment processor’s merchants and payment histories.

Use Updated ACH Risk Management Systems

Most modern payment processors now make available risk management systems that are designed to help you avoid being defrauded. These risk management systems are only helpful, however, when you use the most updated versions of them available.

When your risk management systems become outdated, you miss out on important updates that could flag fraudulent checks or even stop ACH payments from impacting your business. These updates may be available for you to download and implement in your business’s computer systems. Alternatively, you may need to regularly purchase updated versions of your chosen risk management system from the maker of the program or software.

When you do not accept checks or ACH payments at your business, you miss out on the chance to increase your profits. You can put your mind at ease and accept checks with confidence by knowing what steps to take to prevent fraud and also by learning what risk management tools for check payments are available to you.