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Re: Scammers˘ New Billion-Dollar Bank Fraud (fwd )

Yeah, I knew of the dangers of ACH for a while. That's why I went through all that trouble to make a new bank account at Keypoint a few years ago and use that account only for Fidelity transfers and Sonic.NET payments. I also recommend that you do this as well if you do have any bank accounts connected anywhere. BTW, direct deposit can have the same problem. I was going to bring that up in our discussions with Holly, but didn't want to complicate matters. > From: Noelle <noelle> > Date: Mon, 5 Jan 2026 14:47:59 -0800 (PST) > > > Date: Mon, 05 Jan 2026 11:05:04 +0000 > > From: Lever Reports <http://www.levernews.com/~editor> > > > > Forward this email to others so they can sign up [ > > https://www.levernews.com/r/c9dd5d7e?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07 > > ] > > > > Scammers’ New Billion-Dollar Bank Fraud > > > > By Freddy Brewster > > > > https://www.levernews.com/r/b6b73156?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07 > > > > View Article In Browser [ > > https://www.levernews.com/r/69de71e1?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07 > > ] > > > > It’s easy to get robbed these days. All a thief might need are the 17 > > numbers found on your publicly available banking documents.  > > > > Just ask Scott Delman. For nearly a year and a half, someone used Delman’s > > banking information to deduct monthly car insurance payments from the > > theater producer’s bank account, according to financial documents he > > shared with The Lever. In total, the fraud cost him more than $4,300. So far, > > he’s yet to be reimbursed.  > > > > Delman has come to believe the matter will cost people huge amounts of money, > > and even poses a national security risk. > > > > “Imagine if the Russians or Chinese focused on the ‘opportunity’ — > > they could raid American accounts and create a crisis of confidence which > > would devastate the banking industry,” he said. > > > > https://www.levernews.com/r/9e801b6c?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07 > > > > Delman is just one of a growing number of victims of automated clearing > > house (ACH) fraud, a kind of digital robbery that involves scammers using a > > victim’s financial information — their bank account number and their > > bank’s routing number — to withdraw their money.  > > > > ACH fraud is becoming ever more common due to an increase in digital > > payments [ > > https://www.levernews.com/r/e88598de?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > and phishing scams, [ > > https://www.levernews.com/r/ed4575e6?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > in which fraudsters trick consumers into sending sensitive information, > > often by email. A report [ > > https://www.levernews.com/r/c5799f7c?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > by the Federal Trade Commission found that in 2024, there were more than > > 47,000 reports of bank transfer or payment fraud, which can include ACH > > fraud, totaling more than $2 billion, an increase of nearly 10,000 reports > > and nearly triple the monetary damages consumers lost in 2021. [ > > https://www.levernews.com/r/3dc2d3c7?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > > > Once these scams occur, there’s no guarantee that victims will be > > reimbursed. A patchwork of federal regulations, district court rulings, and > > private industry guidelines govern banks’ obligations for repaying targets > > of such fraud. The average consumer has roughly 60 days to report ACH fraud > > in order for financial institutions to fully refund them; many people, like > > Delman, don’t discover the theft in time.  > > > > Regulations are even less supportive for small businesses. Oftentimes, > > business- and corporate-account holders have just 48 hours to dispute > > potentially fraudulent charges. What’s more, a recent federal court ruling > > made it even harder for businesses to sue financial institutions for > > negligence, even when these institutions fail to undertake adequate fraud > > surveillance.  > > > > For many, suing banks over the matter isn’t even an option, because > > financial institutions have locked customers into arbitration agreements > > that force them into a corporate-friendly private justice system [ > > https://www.levernews.com/r/1f57d3cb?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > . > > > > Banks themselves admit that ACH fraud is shockingly simple to pull off.  > > > > “All a scammer needs is your account number and routing number to initiate > > ACH transactions — transfers, withdrawals, and payments — as if they > > were their own account, all without your knowledge,” the Bank of Colorado > > wrote in a February blog post [ > > https://www.levernews.com/r/2148d8d5?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > . “It could begin with a stolen check, a breach of your business’s > > network, or the installation of malware.” > > > > Bank account fraud is nothing new; the Steven Spielberg film Catch Me If You > > Can chronicled how real-life scam artist Frank Abagnale, Jr. used bank > > account and routing numbers [ > > https://www.levernews.com/r/0483e11f?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > in the 1960s to allegedly steal millions. But the practice has reached > > dizzying new heights: Abagnale, now a security consultant, recently warned [ > > https://www.levernews.com/r/01534478?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > that check and automated clearing house fraud targeting businesses resulted > > in more than $2.8 billion in losses in 2024 alone. > > > > Financial fraud has exploded in the past few years with consumers reporting > > more than $12.5 billion in losses in 2024, a 25 percent increase from the > > year before, according to the Federal Trade Commission [ > > https://www.levernews.com/r/ea8566cd?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > . Additionally, the FBI found [ > > https://www.levernews.com/r/62b2068e?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > that fraudsters stole more than $16 billion from consumers in 2024, > > according to reports filed with the bureau.  > > > > A July Pew Research poll [ > > https://www.levernews.com/r/d0074b0b?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > found that 73 percent of adults experienced some sort of online scam or > > potential financial attack, and most believed that the explosive growth in > > artificial intelligence will only make the scam and fraud attacks worse.  > > > > President Donald Trump’s deregulatory agenda isn’t helping, said Adam > > Rust, director of financial services for the consumer advocate group > > Consumer Federation of America > > > > “Unfortunately, this administration has gutted the agencies responsible > > for policing fraud and scams, and it appears that even the banks are > > realizing the systemic abandonment of financial protection infrastructure > > compromises their interests,” Rust told The Lever. > > > > A Glitch In The Banking Matrix > > > > Automated clearing house transactions include just about every modern > > digital money transfer, including [ > > https://www.levernews.com/r/33bc95cf?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > direct paycheck deposits, Social Security payments, tax refunds from the > > Internal Revenue Service, and a number of other transactions. In 2024, more > > than $86 trillion [ > > https://www.levernews.com/r/f8f7a007?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > moved through the network. > > > > One of the more common ways scammers access sensitive banking information is > > through phishing scams asking potential victims to verify bank account > > information or other sensitive information. A similar process works for > > businesses, and fraudsters can take it a step further.  > > > > “They hack into a company's email network to monitor communication > > patterns,” the Bank of Colorado noted in its February warning [ > > https://www.levernews.com/r/384ab688?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > . “Once they have enough information, they impersonate the company and > > contact their clients to provide a new (fraudulent) bank account for > > payments. If the client follows through, they unknowingly send funds to the > > scammer instead of the legitimate vendor.” > > > > According to a 2025 report [ > > https://www.levernews.com/r/4db51ed8?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > by the Association of Financial Professionals, a banking industry group, > > once a fraudster enters a victim's account, they tend to start with > > low-value withdrawals and gradually increase the amount until they are > > caught. > > > > Sometimes, the scammers come from inside the banks themselves. In August, a > > vice president of a regional bank in Alabama was sentenced to 60 months [ > > https://www.levernews.com/r/427ee671?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > in prison for a $2.3 million, 10-year-long scheme in which she conducted > > illegal ACH transfers to pay her own personal bills. On Dec. 22, the FBI > > announced [ > > https://www.levernews.com/r/a29a1786?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > it broke up a $28 million fraud ring in which scammers committed > > unauthorized bank transfers, which can include ACH transfers, by tricking > > people into handing over their banking information. > > > > The 47,000 fraud cases in 2024 by the Federal Trade Commission are likely an > > undercount. That’s because people often report the crimes to a variety of > > law enforcement agencies, including the FBI and local police, said Carla > > Sanchez-Adams, a senior attorney with the consumer-focused law group > > National Consumer Law Center. There is no central database to compile this > > information. > > > > As these scams proliferate and increasingly rely on artificial intelligence > > to do so, regulators have had limited success stemming the tide — or > > guaranteeing that victims are made whole. > > > > In 1978, Congress passed the Electronic Fund Transfer Act [ > > https://www.levernews.com/r/740b80d7?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > to provide a basic level of consumer protection for people sending > > electronic money transfers, a relatively new technology [ > > https://www.levernews.com/r/865dd7ce?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > at the time. The law, which applied strictly to consumers, allows [ > > https://www.levernews.com/r/10e59ba8?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > people 60 days in most cases to contest unauthorized withdrawals and places > > limits on how much money people would be liable for in such cases. (Banks > > aren’t required to reimburse consumers when they’re tricked into > > authorizing such withdrawals, and bank lobbyists have fought attempts [ > > https://www.levernews.com/r/b49d3b31?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > to limit this exception.) > > > > After the 2008 financial crisis, the Dodd-Frank Act transferred [ > > https://www.levernews.com/r/e1e7eeba?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > most rulemaking procedures related to the Electronic Fund Transfer Act from > > the Federal Reserve, a banking regulator, to the newly established Consumer > > Financial Protection Bureau to consolidate [ > > https://www.levernews.com/r/306aec86?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > and expand enforcement of consumer financial protections. The bureau > > subsequently [ > > https://www.levernews.com/r/202917c3?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > cracked down on payday lenders, forced increased transparency around credit > > card fees, and enacted other new consumer protections.  > > > > But under Trump, the Consumer Financial Protection Bureau has eliminated [ > > https://www.levernews.com/r/b2b618bf?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > at least 67 regulatory guidances since January, many of which will impact > > the Electronic Fund Transfer Act. That included a Biden-era proposed rule > > that would have expanded [ > > https://www.levernews.com/r/614582d6?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > some of the Electronic Fund Transfer Act’s protections for consumers who > > own cryptocurrencies [ > > https://www.levernews.com/r/a5dbd2b3?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > .  > > > > The American Bankers Association, a lobbying group for bankers that has > > routinely [ > > https://www.levernews.com/r/cf88609a?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > sued [ > > https://www.levernews.com/r/2aaa9b01?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > the Consumer Financial Protection Bureau, wants Trump to establish an Office > > of Scam and Fraud Prevention [ > > https://www.levernews.com/r/093a92e8?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > to allow agencies to better share information regarding frauds and scams. > > But such a department would be largely pointless, said Rust with the > > Consumer Federation of America, because it would lack any enforcement > > mechanisms.  > > > > “There is a need to improve information sharing, but creating a new office > > is not necessary,” he said. > > > > Business and corporate bank accounts are governed by Uniform Commercial Code > > Article 4A, which can leave just a 24-hour window [ > > https://www.levernews.com/r/09813ddb?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > for business and corporate account holders to contest unauthorized ACH > > transactions, since businesses are required to have heightened security > > measures to protect against fraud.  > > > > A private-sector body called Nacha [ > > https://www.levernews.com/r/916b4c5a?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > also sets rules and standards for financial institutions that use the > > automated clearing house network, and which allows [ > > https://www.levernews.com/r/836cd0d8?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > business- and corporate-account holders 48 hours to contest unauthorized ACH > > transactions. In 2026, Nacha plans to strengthen [ > > https://www.levernews.com/r/5c27020f?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > its fraud detection rules by requiring member banks to monitor accounts for > > large withdrawal spikes and high-value transactions, among other actions. > > > > “[Nacha is] not like the [Consumer Financial Protection Bureau], but they > > have been helpful on fraud prevention,” Rust said. “During the peak of > > online payday lending, Nacha's rules helped to identify some of the lenders > > with the most abusive collections practices.” > > > > However, Nacha’s board of directors [ > > https://www.levernews.com/r/62db5131?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > include representatives from financial companies involved in some of the > > most prolific consumer fraud cases in U.S. history, including Wells Fargo [ > > https://www.levernews.com/r/e9e56b51?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > JPMorgan Chase [ > > https://www.levernews.com/r/cd09c3e9?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > Bank of America [ > > https://www.levernews.com/r/6c64ef9b?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > Navy Federal Credit Union [ > > https://www.levernews.com/r/f7106201?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > and Evolve Bank & Trust [ > > https://www.levernews.com/r/d56cd13a?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > . > > > > Some smaller [ > > https://www.levernews.com/r/4a2f09ae?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > regional [ > > https://www.levernews.com/r/53adb9cd?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > banks [ > > https://www.levernews.com/r/a7103269?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > have filed comments [ > > https://www.levernews.com/r/7e7286dc?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > urging regulators to increase awareness of ACH fraud and other banking > > scams. These banks have called to extend business-account fraud reporting > > deadlines. > > > > “The problem is that the discovery of an alteration or a counterfeit is > > not often discovered until the customer receives their bank statement which > > could be up to 30 days after it is presented for payment,” one bank wrote [ > > https://www.levernews.com/r/60ba9115?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > to regulators in July.  > > > > Banks’ New Get-Out-Of-Jail-Free Card > > > > Nacha was among the business interests that supported a 2025 Fourth Circuit > > Court ruling weakening banks’ and other financial institutions’ fraud > > monitoring obligations.  > > > > That court case [ > > https://www.levernews.com/r/41d16789?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > called Studco Building Systems U.S. v. 1st Advantage Federal Credit Union, > > involved a metal fabrication company, called Studco, suing a credit union > > that processed fraudulent charges. In 2018, the metal fabrication company > > received an email from a steel company saying that the steel company was > > changing its bank account and that payments should be directed to the new > > account. But that email was from a fraudster.  > > > > The federal court for the Eastern District of Virginia ruled in the metal > > fabricator’s favor, awarding the company $560,000, plus attorneys' fees > > and costs.  > > > > The court found that since the credit union failed to regularly check the > > fraud detection system [ > > https://www.levernews.com/r/ca8268b0?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > it had in place to identify information mismatches like those employed by > > Studco’s scammer, the institution failed to act “in a commercially > > reasonable manner.”  > > > > However, the ruling was soon reversed [ > > https://www.levernews.com/r/bf985782?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > by the Fourth Circuit Appeals Court, which found that the credit union was > > not liable because Studco failed to do its own due diligence on the matter.  > > > > The Appeals Court ruling “really lets the banks have more protections when > > these things happen,” said Jennifer Beckage, managing director of law firm > > Beckage Firm, who represented Studco in the lower court.  > > > > “What the court ended up doing here was saying that it was enough for the > > credit union to rely just on the account number, even if there was a > > difference in address and name,” she added. “Even if [the credit union] > > is getting alerts about potential fraud.” > > > > The metal fabrication company appealed [ > > https://www.levernews.com/r/b47eb366?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > the Appeals Court decision to the U.S. Supreme Court, but the high court > > declined to hear the case in October, letting the lower court decision > > stand. > > > > In an amicus brief [ > > https://www.levernews.com/r/fec76b30?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > to the Fourth Circuit Appeals Court, Nacha stated that it would be too > > cumbersome for banks to have to constantly match names on accounts. > > > > “Making beneficiary banks responsible for adjudicating the suspiciousness > > of a mismatch would massively delay payments,” the nonprofit wrote. “ > > Alternatively, to avoid time-consuming and resource-intensive investigation, > > beneficiary banks might simply reject many legitimate payment orders because > > the cost of resolving discrepancies and the potential liability for a > > misjudgment would be untenable.” > > > > Sanchez-Adams, the attorney for the National Consumer Law Center, said there > > is a need to better protect business account holders and enable them to sue > > for damages and legal costs after scams. > > > > “I Learned That Crime Pays” > > > > Robert Warren, co-owner of New Dawn Realty in Georgia, knows firsthand how > > easy it is to get ripped off through ACH scams — and how difficult it is > > to get your money back.  > > > > “It's something that needs to be told to the masses, people are not aware > > of this epidemic of crime that goes on a daily basis in this country,” he > > told The Lever. > > > > For Warren, the problems started in September 2023, when a scammer > > transferred $17,198.19 from his business account, according to documents > > Warren shared with The Lever. Warren reported the fraud to his bank two days > > later, but according to the bank, it was already too late to reimburse the > > payment.  > > > > “We are not able to reimburse you because too much time passed before you > > notified us… about the charge,” states a letter Wells Fargo sent to > > Warren. > > > > But Warren refused to give up. After he reported the incident to his local > > police, Capital One records obtained by law enforcement showed that a woman > > who worked for a regional bank in a town north of Chicago received the > > funds.  > > > > Warren called the woman, and he says she told him that her account was also > > hacked. Warren prodded the woman, who did not respond to The Lever’s > > interview requests, into filing a police report. > > > > Warren eventually called Capital One himself. The bank told him they couldn� > > �t talk to him because he didn’t have an account with them, so he opened > > one.  > > > > “I just kept getting the run around: ‘We're working on it. We have a > > case. It'll take 30 days, 60 days, we'll get back with you,’” Warren > > said.  > > > > So he started filing reports with the FBI and federal regulators, including > > the Federal Reserve, the Federal Trade Commission, the Small Business > > Administration, the Internal Revenue Service’s investigations unit, the > > Justice Department, the Secret Service, and Nacha, the industry group > > overseeing the ACH network.  > > > > Warren also called the Office of the Comptroller of the Currency [OCC], an > > obscure but important banking regulator [ > > https://www.levernews.com/r/26801c8a?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > that enforces certain consumer protection laws. > > > > A week later, he got a call from Capital One and Wells Fargo saying that the > > OCC called them — and that Warren will be getting his money back. > > > > Warren was able to recoup his money — $17,000 — just days before his > > birthday. But due to the patchwork of regulations and a lack of consumer > > support and information, it took him five months of diligent work.  > > > > Warren, and financial institutions, recommend [ > > https://www.levernews.com/r/e1597e23?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > that consumers and business account holders routinely monitor their accounts > > for suspicious activity. Consumers can block ACH transfers [ > > https://www.levernews.com/r/411df9eb?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07] > > from their accounts. Business account holders can enroll in a fraud > > prevention tool called Positive Pay [ > > https://www.levernews.com/r/2d573e2c?m=c7c41f62-6bc5-4c98-ae9b-16d6eceafe07], > > which allows companies to issue only a certain amount of verified checks > > that can be cashed.  > > > > Through all his troubles, Warren learned other valuable lessons. > > > > “I learned that crime pays. People say it doesn’t, but boy it pays out > > the ass,” he said. “And I learned that persistence pays off, too.”


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