*** SPECIAL FRAUD ALERT FOR MEMBERS ***
Account Take Overs
Chosen Payments has recently become aware of fraudulent activity involving your industry. As an endorsed provider for your association and your Partner in Success, we wanted to share this information with you right away so that you can monitor your Merchant Account.
This newest trend is called an Account Take Over or ATO. In this scheme, a fraudster contacts your merchant services provider such as Chosen Payments and asks to change the bank account that credit card funds are deposited into daily. In order to accomplish this, the fraudster must obtain the routing number of the account that funds are flowing into. The fraudster then provides a new bank routing number for an account they just opened. While it is difficult to open a business bank account without proving ownership of the business, it can be done. It has been done!
The rerouted money will land in the fraudster’s account. From there, typically within 2 to 10 days, the fraudster withdraws the money and disappears. While you would expect banks to completely verify the identity of a person opening a bank account, the technology of producing fake documents has vastly improved in the past decade and can sometimes even fool bankers.
Protecting Your Business from an ATO
There are two things you can do to protect yourself against an ATO. First, be careful about who you expose your bank routing number to. Obviously, any checks you issue disclose the full routing number to the recipient so it is hard to hide it from those you issue checks to. However, be very cautious about who you give it to over the phone and have a clear understanding of why you are being asked to provide your routing number.
The second method is to make sure that you reconcile your batch submissions to your actual deposits. A merchant not associated with Chosen Payments recently discovered that $800,000 never made it into the Merchant account. It is very important that you not simply place trust that the money will be there even as much as we consider ourselves to be your most trusted credit card processor in the industry. Thieves use a lot of technology today so watch your money closely.
Financial ATO Risk
This isn’t unique to just credit card processing. Fraudsters can target various industries as well as people. This includes a company’s own employees by rerouting direct deposit payments into a fraudulent account. This may be as simple as an email to a human resources representative. Though the fraud attempt may seem obvious, savvy employees have been duped. These phishing emails often lack the obvious signs of a scam. Still, it’s nothing new, from phone attempts seeking to get one’s personal information to fake charities attempting to take advantage of a person’s generosity, fraudsters are always looking for areas of vulnerability to attack. The key is to be aware and protected.
What We Do to Protect You
Association members who process with Chosen Payments can have added assurance that our company makes it a point to keep these fraud schemes close to non-existent. The reason for that is the fact the all Chosen Payments Merchant Accounts are monitored for ATO. It is difficult for a fraudster to simply call and change a bank routing number. However, on the rare occasion this should occur, our merchants are backed by our team of professionals who can step in and vigilantly address the fraud. While we can’t share our security technology for obvious reasons, we use a lot of it specifically to detect such attempts and have procedures in place to protect our Merchants. Despite those layers of protection, we encourage you to monitor your account diligently at this time.
** For updates regarding Covid-19, please see our resource page here: https://chosenpayments.com/covid-19/
