Electronic Payment Fraud: Liability & Risk

Liability shifts depending on the type of fraud, how it was carried out, and whether a consumer or commercial account is involved, with a tangle of overlapping legal frameworks governing the outcome. UCC Article 4A allows institutions to shift liability to commercial accountholders under certain conditions, while Regulation E tilts heavily in favor of consumer protection. Layered on top of that, Nacha rules place ultimate liability for unauthorized ACH transactions on the originating depository financial institution (ODFI), though collecting from the ODFI after return deadlines have passed is often easier said than done. Across every scenario, one requirement remains constant: financial institutions must have commercially reasonable security procedures in place, or risk losing liability protection altogether. This webinar will cut through the legal complexity to explain exactly which party bears liability for the various types of ACH and electronic payment fraud, in both consumer and commercial contexts. You'll leave with practical steps to strengthen your institution's security procedures and minimize exposure before fraud losses land on your balance sheet.