Cybercriminals are constantly evolving their tactics, and ACH fraud via phishing emails is one of the most financially devastating schemes we see today. These attacks are carefully crafted to look legitimate, but the consequences of falling victim can be catastrophic, especially for small and mid-sized businesses.
What is ACH Fraud?
ACH stands for Automated Clearing House, a U.S. electronic payment network used to transfer funds between bank accounts. It’s commonly used for direct deposit, bill payments, and vendor transactions, making it a frequent target for fraud.
ACH fraud occurs when a threat actor tricks an employee into authorizing a fraudulent electronic payment. Most often, the scam starts with a phishing email, or a message disguised to look like it’s from a trusted vendor, executive, or even a known employee. The email might request a change to payment instructions, update banking details, or ask for an urgent wire transfer.
Once the funds are transferred, they’re nearly impossible to recover.
How These Attacks Impact Businesses
Even businesses with robust email security can be targeted if they lack layered processes to verify financial transactions.
ACH fraud can result in high-dollar financial losses (sometimes six figures or more), legal ramifications, costly internal investigations, regulatory scrutiny, and insurance implications, to name a few.
What to Watch For
Be suspicious of any emails or SMS/text messages with the following themes or requests:
- Update banking information like Direct Deposit, Routing or Account numbers
- Provide tax-related information like W2/W4 data
- Purchase gift cards and provide the codes on the back
- Emails, texts from UPS/FedEx, Apple, Microsoft, or your bank
- Messages creating urgency or using emotional language (“ASAP,” “Confidential,” etc.)
- Follow-up to an action you didn’t take
What You Can Do to Prevent ACH Fraud
Dual control is one of the most effective tools to prevent ACH fraud. This means that two individuals are required to authorize high-risk financial activities, like changing bank details or initiating large transfers. This simple, internal check creates a critical barrier that makes it exponentially harder for attackers to succeed, even if they manage to fool one person.
What To Do If Your Suspect Fraud
- Do not respond to or forward the suspicious email.
- Contact your IT or cybersecurity team immediately.
- Verify requests via a known phone number or in person. Do not use the phone number contained in the email or SMS message.
- Report the incident to your IT partner and local authorities. It’s not enough to just delete the email.
Cybersecurity Threats Are Evolving. So Are We.
Bad actors are using increasingly sophisticated methods to trick you into taking action. GadellNet’s cybersecurity team is here to support you with layered defense strategies and staff awareness training.
Check out our related insights on Fake Captcha prompts and the Web Envy scam, or contact us to learn how we can protect your team.
