Protecting Your Business from Check and ACH fraud
August 19, 2025
In today’s fast-paced business environment, financial fraud is an ever-present threat, especially for small and mid-sized businesses. Among the most common and costly forms are check fraud and ACH fraud, both of which continue to impact thousands of businesses each year. Whether it’s counterfeit checks, altered payee information, unauthorized check issuance—or fraudulent ACH transactions such as spoofed vendor payments or unauthorized debits—the consequences can be severe: lost revenue, damaged relationships, and compromised trust.
The Growing Risk of Fraud
Despite the rise in digital payments, checks remain a widely used method for business transactions. Unfortunately, this makes them a prime target for fraudsters. According to the Association for Financial Professionals 2025 survey*, checks were still the payment method most frequently targeted by fraud in 2024, with nearly 63% of organizations reporting attempted or actual check fraud.
But checks aren’t the only vulnerability. As businesses increasingly rely on electronic payments, ACH fraud—which involves unauthorized or manipulated electronic transactions—has also become a growing concern. Criminals exploit weaknesses in payment systems, vendor relationships, and internal controls to initiate fraudulent ACH transfers, often without detection until significant damage is done.
Fraudsters use a variety of tactics, including:
- Counterfeit checks
Fake checks created to look like legitimate ones. - Check washing
Using chemicals to change the payee or amount on a stolen check. - Forged signatures
Imitating authorized signers to issue fraudulent payments. - Stolen checks
Intercepting checks in transit and cashing them illegally. - ACH fraud schemes
Including spoofed vendor emails requesting changes to payment instructions, unauthorized debits, and account takeover attempts.
These scams can be difficult to detect until it’s too late, especially for busy business owners juggling multiple responsibilities.
How to Spot and Prevent Fraud
Recognizing the signs of fraud early can make all the difference. Here are a few red flags to watch for:
- Unexpected changes in check amounts or payees.
- Duplicate check numbers or missing checks in your register.
- Vendors claiming non-payment despite records showing otherwise.
- Bank statements showing unfamiliar transactions.
- Requests to update vendor banking details via email or without proper verification.
To protect your business, consider implementing these best practices:
- Secure your supply of blank checks and limit access to authorized personnel.
- Reconcile accounts regularly to catch discrepancies early.
- Train employees to recognize suspicious activity.
- Use secure mailing methods for sending checks.
- Limit the number of authorized signers and monitor their activity.
- Implement dual controls and verification procedures for ACH transfers and vendor account updates.
Leveraging Digital Tools
In addition to manual best practices, businesses can layer on digital tools to further help prevent fraud. There are a variety of alert options you can set up in RCU’s digital banking to notify you of unexpected activity like balance, login, transaction, and transfer alerts. You can also sign up for additional fraud detection technologies that can be integrated into your everyday operations.
Redwood Credit Union’s new Business Positive Pay solution is fully integrated and provides a simple yet powerful way to prevent fraud at the source. With Positive Pay, you upload a list of issued checks—including check numbers, amounts, and payees—and RCU automatically compares incoming checks against your list. You can also build ACH rules to pay or return electronic transactions. Any mismatches are flagged for your review before payment is processed, giving you greater control and confidence.
Stay One Step Ahead
Fraud prevention isn’t just about reacting—it’s about staying ahead of the threats. By understanding the risks, employing some best practices, and taking advantage of RCU’s digital banking alerts and Business Positive Pay, you can better protect your business’s financial health and reputation.
To learn more about how Business Positive Pay can help safeguard your business, contact us today at (707) 576-5070 or visit redwoodcu.org/positive-pay.
Business Positive Pay helps detect actual or potential fraud by allowing the Company to designate and/or decision items to pay. Certain restrictions may apply. Service is not guaranteed to prevent or detect fraud.
Business must apply for and be granted access to Positive Pay services. Additional fees may apply.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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