It is becoming increasingly difficult to stay ahead of the fraudsters. Fraud is everywhere today and some businesses are viewed as easy targets. Although small and mid-sized businesses may be viewed as having fewer resources than the big guys, there are many resources available to protect your business.
Our guest writer, J.B. Phillips, Vice President, Business Banking, at First American Bank, has some simple solution banking tools to help protect your business from fraud.
We would like to thank J.B. for sharing his knowledge and expertise with us and our clients.
Protecting Commercial Deposit Accounts from Fraud
By J. B. Phillips, V.P. Business Banking, First American Bank
The reality is “fraudsters” are targeting your business deposit accounts. However, there is good news; banks are now offering fraud prevention tools that can easily be employed to help protect your accounts. At First American Bank, we have been working with our commercial customers to implement services such as Positive Pay, ACH Filters / Block Authorization and Online Banking Dual Control for ACH Payments and Wire Transfers, each of which provides low-cost account protection.
Positive Pay
Positive Pay helps protect a commercial account from check fraud by notifying the account owner(s) of unauthorized checks when presented for payment. As checks are issued, the customer will provide the bank with specific information about each check. When a check is presented for payment, the bank will review the customer’s list of “authorized” checks. If the check is on the list, it will be paid. If the check is not on the list, the customer will be notified and be given the option to approve the check for payment, or have it returned.
ACH Filters / Block Authorization
An ACH Filter is placed on a commercial account to limit electronic debits from the commercial account to a list of pre-approved payees. Block Authorization allows a commercial account to block all electronic debits from the account. Electronic debits are authorized, automatic payments from the commercial account including, for example, insurance premiums, payroll services, and IRS Tax payments initiated through the EFTPS system.
Online Banking Dual Control for ACH Payments and Wire Transfers
When a business utilizes online banking tools to initiate electronic debits from its commercial account to the accounts of employees, vendors, and/or customers at another bank, it is recommended that the process employ dual control. This will require that two business representatives, operating from separate computers, approve the electronic debit. Dual control not only protects a business against untrustworthy representatives, it also protects a business against “fraudsters” that have gained access to business computers and passwords by preventing them from unilaterally making unauthorized electronic debits from the commercial account.
First American Bank – Member FDIC
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