ACH phone in fraud
As readers know, ACH (Automated Clearing House) is a goldmine for those who deal with fraud. We were recently reminded of this when a friend recently started bouncing checks. He couldn’t figure out what was wrong, and went to the bank, check register in hand. The platform officer pulled up his records, and said, “Well, your $16,000 telephone withdrawal put you negative.” It came as something of a shock to our friend that someone could just telephone in a withdrawal, a fact of which he was totally unaware. The good news is that the bank will have to put the money back, and hopefully will cover the bounced-check fees.
Our friend asked how he could prevent this in the future, and was told that since he has no computer, the only thing he could do was to be careful to reconcile his account each time the statement came in and report all future bogus withdrawals in as timely a manner as possible. (Checking your account online is even better.) Short of this, he was told, there was nothing that could be done. The bad news is that there is every reason to believe that it could happen to him again, and, in fact, could happen any of us. In truth, while there are things that can be done on a corporate level to mitigate the threats of ACH (see the March 2006 issue of AEGIS), there is little that can be done on a personal level. Therefore, it is important to keep track of your account so you can report anomalies in a timely matter. While this system works well for fraudster, bank, and customer, it assumes that you actually check your statements. This is not always the case. We know of one woman whose credit card was stolen. She kept paying the bills, even though the charges were not hers. Go figure.
Misuse of credit is not just a problem with ACH. A friend of ours, who is quite diligent about tracking his accounts on-line, noticed that his American Express account showed a number of purchases made in Rome. He looked out the window and discovered that he was, as he had believed, still in New York. He checked his wallet, and his credit card was still there. This was beginning to appear a bit suspicious to him, so he picked up the phone and called American Express, suggesting they cancel the card. He was told not to cancel the card – a procedure annoying to both the customer and the credit card company – but to keep track of what was going on. The next day he discovered that he was now in Switzerland, and again called and was given the same advice. When his bill came, he marked the fraudulent charges, and they were taken off.