How Often Do You Check Your Bank Statement? It Should Be Every Day
Fabulous Floors|Issue 01, 2020
How Often Do You Check Your Bank Statement? It Should Be Every Day
You or your company’s bookkeeper review your business’s bank statements every month. This month you noticed some unusual activity. There are wire transfers listed a week earlier that you do not recognize. You call the bank, only to be told that it is too late to have the bank reverse the transfers. The bank explains that you had to report the unauthorized transfer within 24 hours. Is the bank correct? Is there anything you can do to avoid the loss? And what can you do in the future to avoid such theft? The answer to each question, as explained below, is yes, the bank is correct. However, there may be something you can do to minimize the loss, and there are steps you can take to avoid such fraud in the future.
Jeffrey W. King

ACH Fraud

There are many types of fraud that affect businesses. One of the biggest concerns is Automated Clearing House (“ACH”) fraud. ACH is a system that enables the exchange of funds between businesses and individuals by using checks, wire transfers, and direct deposits. Criminals need only two pieces of information to commit ACH fraud: Your business checking account number and your bank routing number. This means that anyone who has a check from your business may have all the information needed to steal money from your account through an ACH transfer, either by phone or online. Criminals are increasingly targeting small and mid-sized companies, because they often have less-sophisticated security systems than larger companies.

Many business owners assume the same rules of personal banking apply to commercial business accounts, but this is not the case. The law protecting electronic transfers apply only to personal bank accounts, not business accounts. For a personal account, the individual may have up to 60 days to report any fraud. In contrast, a commercial business has much less time to report cases of fraud. Many commercial claims must be reported within 24 hours. The burden is on the business owner to notify the bank immediately if there is a disputed transaction.

There are many types of fraud that affect businesses. One of the biggest concerns is Automated Clearing House (“ACH”) fraud.

Steps to Safeguard Your Business Bank Accounts.

Fortunately, there are precautions that a flooring retailer or contractor can take to guard against ACH fraud.

You need to be aware of unauthorized transactions in banking accounts. Given that your business has only one day to report possible ACH fraudulent activity, you should consider using online banking, and check your bank statements every day.

It is not uncommon for the fraud to be committed by an employee who has access or authority over the business’s bank accounts. You do not want to be a victim of internal fraud by allowing the individual who is checking the accounts to also be able to hide their own fraud. Accordingly, it is recommended that the person reviewing the bank statements does not have authority to sign checks or transfer money

If you find any improper or suspicious activity, immediately report it to your bank.

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Issue 01, 2020