Securing ACH Against Emerging Authentication Bypass Methods
The Automated Clearing House (ACH) network is a digital funds-transfer option used by banks, credit unions and other financial institutions to batch and send deposits or payments between participating providers at specific times of the day. Since people receive payroll checks, government benefits and other transactions through this method, fraudsters have attempted to bypass ACH authentication methods. Cybersecurity professionals must know how to respond to this emerging threat.
Become Familiar With Common Attacks
Cybercriminals continually adapt their techniques to increase success rates by catching people off guard. Even so, they deploy some approaches with above-average frequency. For example, synthetic identity fraud involves blending fabricated and real information to create new identities. The goal is to create a fabrication that can pass ACH verifications and other security checks. One study revealed a 14.2% year-over-year increase between 2022 and 2023 in synthetic identity cases.
Account takeovers are a broad attack category whereby unauthorized parties gain access to personal or business accounts for malicious purposes. Cybercriminals use various methods to achieve this, including:
- Phishing
- Stealing credentials
- Breaking into accounts with software
- Social engineering
Since social engineering often involves the victim willingly providing their details, the attack timeline can take longer. Cybercriminals may spend weeks within networks, acquainting themselves with someone’s communication style before posing as a legitimate user. They may impersonate trusted parties — such as people from an accounting or human resources department — and send messages insisting that an individual needs to provide personal information to avoid unwanted consequences, such as delayed paychecks.
A 2024 study based on a security platform provider’s internal data showed a 24% rise in account takeovers in the second quarter of the year compared to the same time frame in the previous year.
These trends emphasize the importance of cybersecurity professionals, anyone accepting or sending ACH payments, and other relevant entities understanding common fraud techniques and taking appropriate measures to curb them. Additionally, they should stay abreast of other possible methods while remembering that cybercriminals often try unfamiliar tactics to broaden their attack reach.
Deploy Detection Methods
Most methods to spot ACH authentication bypass attempts use big data and machine learning to flag unusual characteristics associated with people’s logins, provided information or other aspects. These technologies can find inconsistencies that could indicate fraud.
In one example, a financial institution’s payments arm collaborated with a bank account validation tool vendor to reduce fraud. Collaborations like this make ACH payments safer due to expanded insights and predictive analytics that lower risk and reduce fraud attempts.
Entities processing ACH payments should also carefully scrutinize high-risk payments and perform random spot checks. Those manual activities are excellent complements to automated tools. Cybersecurity team members can assist with establishing processes to reduce friction while protecting against bypass attempts.
When customers wish to establish new or ongoing ACH payments, employees should check their details against fraud databases and sanctions lists before approving requests. Cybersecurity professionals should enable access controls to ensure that only authorized parties can see the content.
Finally, relationship monitoring could help financial industry workers notice signs of potential account compromise. Training employees to recognize suspicious changes is a practical way to elevate awareness.
Apply Preventive Strategies
Businesses and other entities that accept customers’ ACH payments should validate those parties’ identities and obtain their consent before proceeding with transactions. Several accessible options exist to do this, including receiving verbal agreements by phone or obtaining completed authorization forms, either in a digital or physical format.
Additionally, if a known customer requests ACH payment changes, employees should verify those alterations through separate and secure communication channels. Security measures — such as multifactor authentication or facial recognition through phone cameras or webcams — can significantly reduce fraud attempts.
Behavioral monitoring tools may also work in the background to flag tiny but unusual changes, such as someone taking longer than usual to type in their password. Similarly, real-time device identification information can determine if a customer is using a different computer or smartphone for these activities.
Customer-facing content about ACH fraud and authentication bypass methods is also helpful, especially for groups facing above-average risks. Scammers often target older adults because they are nine times wealthier than millennials on average. Additionally, people in this group are frequently less tech-savvy than younger generations, making them easier to fool with online schemes.
Prevention is also essential at the level of those processing ACH payments. Segregation of duties is a practical strategy that prevents single entities from having too much access and authority, limiting the damage they could cause.
Staff members also benefit from updated training since authentication bypass methods change, with some becoming more prominent over time. Cybersecurity professionals should remain at the forefront of these internal practices, sharing their knowledge and experience for optimal outcomes.
Remaining Responsive to ACH Authentication Bypass Attempts
Since ACH payments are popular for business and personal transactions, it is no surprise that cybercriminals attempt to break through their respective authentication methods. Cybersecurity professionals should stay informed about this issue and continually seek ways to detect and prevent it, keeping customers and financial institutions safe.
