Summer 2019 Newsletter Reminder
Supplementing Fraud Detection Standards for WEB Debits
Effective January 1, 2020
Currently, ACH Originators of WEB debit entries are required to use a “commercially reasonable fraudulent transaction detection system” to screen WEB debits for fraud. This existing screening requirement will be supplemented to make it explicit that “account validation” is part of a “commercially reasonable fraudulent transaction detection system.” The supplemental requirement applies to the first use of an account number, or changes to the account number.
This Rule modifies the following areas of the NACHA Operating Rules:
Article Two, Subsection 18.104.22.168 (Additional ODFI Warranties for Debit WEB Entries) to make explicit that a fraudulent transaction detection system must, at a minimum, validate the account to be debited.
- Possible re-tooling of ACH Originators’ fraud detection systems
- Or implementation of a system for Originators who currently do not perform any fraud detection for WEB debits
- These impacts could increase the cost of originating WEB debits for some parties