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Supplementing Fraud Detection Standards for WEB Debits

Effective January 1, 2020


Details:

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.


Technical:

This Rule modifies the following areas of the NACHA Operating Rules:


Article Two, Subsection 2.5.17.4 (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.


Impact:

Potential Impact:

  • 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


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