ACH Specialist Series: Electronic Payment Fraud: When Is Your Institution Liable?
Liability. No institution wants it, but all are at risk. One risk area that has exploded in recent years involves electronic payment fraud – and both ODFIs and RDFIs are experiencing the fallout. ACH fraud can involve consumer or commercial accounts. Do you know which regulations apply to each? What are the return deadlines? What are your institution’s responsibilities to the accountholder? Can you afford to miss this important program?
AFTER THIS WEBINAR YOU’LL BE ABLE TO:
- Distinguish between the ODFI’s and RDFI’s liabilities for ACH payment fraud
- Explain your institution’s responsibilities when acting as the ODFI versus the RDFI
- Define the return deadlines for ACH fraud for consumer and corporate accounts under the Nacha rules
- Understand how to bring a breach of warranty claim against the ODFI after the return deadlines
- Identify when Reg E conflicts with the Nacha rules and when your institution must reimburse consumer accounts for ACH fraud
- Employ new ways to encourage the RDFI to return funds to your institution after the ACH fraud is identified
WEBINAR DETAILS
The tremendous increase in electronic payment fraud has resulted in staggering losses to financial institutions. Liability varies depending on the type of fraud, how it occurred, and whether it was a consumer or commercial account. The assorted legalities are mindboggling. UCC Article 4A permits financial institutions to shift liability to commercial accountholders in certain situations, while Regulation E provides much more protection to consumers. The Nacha rules make the originating depository financial institution (ODFI) ultimately liable for an unauthorized ACH, but it is difficult to get the ODFI to pay after the return deadlines. In all situations, however, the law requires financial institutions to use commercially reasonable security procedures. This webinar will explain which party is liable for the various types of ACH payment fraud and what can be done to protect your institution from liability in both commercial and consumer situations.
WHO SHOULD ATTEND?
This informative session will benefit all personnel involved on the deposit side, including tellers, service representatives, compliance officers, auditors, attorneys, managers, and deposit operations staff and officers.
