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Oklahoma AgCredit members can use operating lines of credit to send and receive funds through ACH or wire transfer. Funds transfer services are convenient and secure, but do involve risks.

ACH DebitAn ACH debit withdrawals money from one account and deposits it in another account. The debit can be incoming or outgoing. ACH transfers are becoming increasingly common as they replace checks for a variety of applications, including payroll (direct deposit) and bill pay.

For example, you may authorize an outgoing ACH from your operating account to pay your farm worker’s wages or other recurring charges such as utilities, insurance, or rent. A government program payment or crop insurance payment can be deposited directly to your operating note via an incoming ACH payment.

ACH SecuritySecurity procedures on ACH payments start with requiring members to sign an origination contract for outgoing ACHs. For incoming ACH payments, we rely on members to review their account statements. Members must verify that the correct amount was applied to their account. Members can use Online Banking to check account balances on a frequent basis.

How ACH Fraud OccursACH debit fraud occurs when an unauthorized withdrawal is taken from your account. Most commonly, fraudsters initiate unauthorized withdrawals to pay credit card balances or bills. Using a vendor’s online payment functionality, the fraudster enters your account number and bank routing number (readily available on any check) as their own, and pays their bill.

Because the ACH codes typically used for these types of payments categorize them as “consumer” transactions, the ACH Network allows a longer timeframe for returns of unauthorized debits. Therefore, these fraudulent transactions are often recovered, however, the longer timeframe delays when you can verify that the payment was received. ACH is a United States only network, thus not available to payees outside the country. ACH stands for Automated Clearinghouse.

Wire TransfersWire transfers are used to move funds directly from one bank account to another, often requiring only an account and routing number. Funds can be sent to accounts inside or outside the US. Wire transfers have been used for years, but there are some drawbacks.

Funds land once the wire goes through, meaning the payee receives their funds almost immediately. The speed is usually a benefit, but can be a drawback in a fraud event. Because of the immediacy, recalling erroneous transactions is much more difficult, involving bank investigations and loss of funds. Sending money via wire transfer typically has higher fees than ACH payments.

Wire Transfer SecuritySecurity procedures for wire transfers start with a call to the person who initiated the fee request to ensure it was valid.  We may ask for verification of wiring instructions from the requester, the recipient or both.

How Wire Fraud OccursWire fraud occurs when a wire request is fraudulently made and completed by the issuing bank. Often a fraudster accomplishes this by hacking the victim’s email account. For example, a fraudster tricks a homebuyer into wiring their down payment to an offshore account by spoofing their real estate agent’s email. Another scenario might be a fraudster impersonating a loan officer asking a loan applicant to wire a processing fee after completing a loan application. In both cases, contacting your Oklahoma AgCredit staff first could save you money and grief.

Take ActionIf you think fraud has occurred – either by funds being fraudulently transferred out of your operating account or by someone fraudulently asking you to transfer funds – immediately contact your local staff. Your staff and the risk management team will research the transfer or request and will take appropriate action.

Despite risks, ACH and wire transfer are usually safe and are beneficial to our members. For information about ACH or wire transfer, contact Angela Landwehr, Director Financial Controls/Risk Management at the Enid office 580-237-2535 or at angela.landwehr@okagcredit.com.

ACH Payments vs Wire TransfersBoth electronically move funds from account to account

ACH Payments

• Frequently used for automatic bill-pay and payroll
• Can take a few days
• More secure, little human intervention
• Offers some chance of recovery in a fraud event
• Funds transfer only within the U.S.
• Free service of Oklahoma AgCredit
   

Wire Transfers

• Frequently used to send a one-time payment
• Instant transfer
• Less protection, more human intervention
• Little chance of recovery in a fraud event
• Funds can transfer to foreign banks
• Outgoing wire fees: $15 in the US; $50 to foreign accounts
  Incoming wire fees: Free, no charge