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You should also check your bank’s antifraud measures to ensure they provide the
protection you need. The law requires a bank to use a “commercially reasonable”
security measures to protect against fraud. This does not require a foolproof system,
or even the best system available. Rather, the procedures must be reasonable based
upon the circumstances of the bank and its customer. The number of transactions,
the amounts typically transferred, and the prevailing good banking practice, will all
be considered. Fewer transactions with lower dollar amounts will not require as much
expensive measures. This puts small businesses at greater risk.
You can establish some procedures with your bank to reduce the risk of ACH
fraud. Your business should consider requesting that the bank institute the following
security measures if practical:
■ A
 n ACH Block: One of the simplest ways to help prevent ACH fraud is to place
an ACH block on your accounts. This block will automatically hold transactions
until you have reviewed and approved the transaction. Such a block effectively
eliminates the possibility of automatic, or non-reviewed transactions. An ACH
block works only if you have a limited number of ACH transactions.
■ A
 uthorized-User: If your business has ACH transactions that occur on a regular
basis, you can provide the bank with a list of authorized-users. You can also spec-
ify dollar limits, and the number of ACH transaction per week or month. If a
request is received from a company not on the list or seeks money over the limit
or more frequently than usual, the transaction will be placed on hold for you to
review.
You should
also check your
bank’s antifraud
measures to
ensure they
provide the
protection
you need. The
law requires a
bank to use a
“commercially
reasonable”
security
measures to
protect against
fraud. This does
not require
a foolproof
system, or even
the best system
available.
Premier Flooring Retailer | Q1 2020
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