The day everyone in the payments industry has been waiting for finally came! New ACH Rules updates were finally approved on March 18, 2024. The approved set of Rules is intended to reduce incidences of fraud, with many Rules specifically focused on reducing credit-push fraud.
In May 2023, Nacha presented a Request for Comment (RFC) which contained nine proposals. Each of the proposals contained aspects of risk management and aimed to reduce the amount of successful fraud while also improving the recovery of funds within the ACH Network. Much of the focus related to credit-push fraud is due to the focus of fraudsters changing their tactics. Because of these new tactics the industry needed to adjust, which is why Nacha released their Risk Management Framework for the Era of Credit-Push Fraud in 2022. This framework encouraged the RFCs Nacha put forth to the industry for approval.
Let’s take a brief look at what was approved.
Nacha determined that all participants within the ACH Network play a pivotal role in not only responding to fraud but also in mitigating it before it reaches the Network. To reduce and respond to credit-push fraud, Nacha followed a credit payment from origination to receipt to develop the Rules. This identified the need for origination monitoring and receipt monitoring, both of which will be implemented in two phases with the deadline for the first phase being March 20, 2026. Nacha is asking that Originators and ODFIs implement strategies to avoid a fraudulent payment entering the Network altogether, while also asking RDFIs to monitor their receipt of credits for anything that seems improper and work with the ODFI to resolve any issues. As organizations are monitoring, we need to have a response plan or capability. This is where the expansion of current Rules comes into play. More specifically, examples include the expanded use of Return Reason Codes R06 and R17. Both expansions would allow ODFIs and RDFIs to more actively and accurately respond to payments transmitted under false pretenses.
Nacha members also approved other Rules updates that could more positively impact financial institutions when processing payments and returns. All-in-all, Nacha has heard our requests for more defined efforts from all participants to better serve the Network.
For a deeper dive into all the new ACH Rules updates and to explore the implications of these amendments on your organization's operations and compliance strategies, check out our ACH Rules Update webinar recording.
Cheers to these positive improvements and fighting fraud in the ACH Network!