What You Should Know About the Federal Reserve Scam

In July 2017, an internet scam provided American consumers with false information that ultimately impacted many merchants and Associate in Risk Management (ARM) professionals across the country.

For both merchants and payment processors, the result of such a scam was lost payments and accompanying return fees that left businesses with unnecessary revenue losses.

The impact of a scam like this also affects Automated Clearing House (ACH) payments.

Should something like the Federal Reserve Scam happen again, what can you do to protect your business?


What is the Federal Reserve scam?

This internet scam of videos and messages informed American consumers that there was money set aside for them to use to pay bills.

The scammers provided false Federal Reserve routing numbers and directed consumers to use these numbers to pay online transactions.

Although this was a completely false claim, many people didn’t realize it and merchants lost the opportunity to collect payments owed to them.

To add insult to injury, merchants were responsible for paying the return fees on all the fake charges they were unable to collect.


What does this mean for merchants if there’s another scam?

If a scam of this proportion happens again, and processors are not quick enough to block out the false routing numbers, transactions will go through and merchants will once again be liable for the returned payment fees.

These fees can add up quickly, costing you thousands of dollars in lost revenue and potentially flagging your business as high-risk with your credit card processors.


What does this do to ACH return rates?

ACH payments are electronic payments created when customers give their originating institution – such as a bank or corporation – authorization to process debits directly from the customer’s checking or savings account in order to pay bills electronically.

When your ACH transactions are not being closely monitored, an internet scam can completely devastate your ACH return rates.

If you are a merchant who processes ACH payments, you may or may not realize that exceeding a 15% overall return rate for ACH transactions can quickly lead to termination of your ACH processing services.

In the world of ecommerce and electronic bill pay methods, there are a variety of unpredictable situations that can cause return rates to rise.

When this happens, your merchant account can be affected long term.

If you’re no longer able to accept ACH payments, you could lose substantial sources of revenue.


What can merchants do to protect their businesses from serious impacts of scams?

As a merchant, one of the best things you can do is to be prepared for the unpredictable circumstances of cyber scams, attacks, and fraudulent activity of any kind. In the rapidly changing environment of cyber security and online merchant transactions, it’s not easy to stay on top of it all while simultaneously running your company.

That’s where partnering with a third-party financial powerhouse can save you thousands of dollars in lost revenue, while ensuring that your credit card processing upholds the highest level of PCI compliance and security.


Remember the Equifax incident?
Scams are everywhere. If a major financial security company like Equifax can become a victim of a security breach, then so can you.

Don’t try to manage your merchant security and PCI compliance requirements alone.

Partner with the financial security experts at MyWatchmen so you can be sure your company is adhering to the latest PCI standards.


Why partner with MyWatchmen?

When you partner with MyWatchmen, we conduct a thorough Merchant Account Analysis that reveals opportunities to negotiate better rates with your processors.

We alert you to any hidden fees, and perhaps, most importantly, conduct a detailed security analysis of each of your accounts.

We advise you how to create a stronger infrastructure for the most comprehensive protection against scams and attacks.

If your credit card data is at risk for potential breaches, we let you know so you can take immediate action before disaster strikes.

Partnering with a financial powerhouse dedicated to monitoring your accounts with processors allows you to do what you do best – conduct your business without worry that you’re incurring excessive fees from chargebacks or PCI compliance issues.

If you ever incur fines or penalties on our watch, we pay the fines for you.

That’s how confident we are that MyWatchmen keeps your business up to date with the latest security standards.

If a scam or attack ever happens, you’ll be prepared.

And, that just may be your best defense.

If credit card security isn’t at the forefront of your mind, know that it is on ours.

Depend on MyWatchmen for increased security and an increased bottom line for your business.

If you don’t see an increase in your bottom line, you pay us nothing.

To learn how we can increase your company’s security and revenue, contact MyWatchmen today.

If you don’t increase your bottom line, you pay nothing for our services. It’s that simple to have our financial experts on your side.

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