Ask HN: Why hasn't the ACH system been more abused?
The simplest explanation is: ACH is reversible. If the consumer notifies their bank of an unauthorized debit within 60 days, the money gets yanked from the originating bank and put back in your account.<p>The originating bank will then do the same to the merchant who debited your account, with feeling and 4 part harmony. If they do this too much (>1% unauthed, or >5% overall), then they get cut off. (Exact thresholds depend on the bank and their risk tolerance and what they've underwritten the merchant for. But those are about the highest numbers you'll see, though sometimes NSF returns can be higher. )<p>ACH never settles. There's no security as such. An ACH transaction happens overnight, on trust, and may come back (by agreement) 60days later, and longer in cases of extreme fraud. So any time you're seeing a 2-3 day hold on ACH, it's the bank doing risk management decisions, not something in the underlying transfer. (note, that may not be strictly true for some correspondent small banks in alaska or other odd time zones, where there really is a day+ delay on things)<p>The only thing that's keeping fraud under control is the banks doing underwriting on the merchants who can do debits. They're on the hook (ultimately) if there's fraud, so it's in their interests to keep it clean. They're also not likely to cut and run, because banking connections to the ACH network are not cheap/easy to come by.<p>(source, I've worked in this space for 18 years)