Let’s make the Fed require verification before allowing ACH withdrawals from your account. ACH (Automated Clearing House) is a government agency whom processes electronic transactions governed by the Federal Reserve. In order to process ACH transactions a company has to be registered with the Fed. The problem comes in that there is no verification of identifiable information before an ACH withdrawal is done. All a thief needs are your routing number and account number, found on any check. Not comforting.
This is contrary to say using a credit or debit card online which requires that your name, billing address, and security code match up. With ACH there is nothing. Yup, you heard it. As stated earlier, all a company needs are the routing number and check account number to pull any amount of money from your account.
Keep in mind, fraudulent transactions are closely monitored by banking institutions as well as the Federal Reserve, but it makes no sense that they don’t very information before allowing a ACH withdrawal to occur. The rest of the industry does it with online electric transactions. Just because it is the government doesn’t mean they should be allow to fall behind the times at the sake of consumer safety.
We must demand the Federal Reserve requires confirmation of personal identification information before allowing ACH withdrawals. Currently, no legislation sits in Congress waiting for a vote, so call your legislator and demand they draft one.
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