First, why am I posting on this old thread?
It’s because I didn’t want to start a new thread and this old thread comes as close to my topic as any I can locate in the forum. This post is about ACH verification and it is about trial deposits and this thread is as close as I could come.
Yesterday I had an interesting experience at PurePoint… I was swept into their security and fraud net on account of something I thought was a routine matter. Turns out I was wrong:
It began when I sought to link an outside financial institution. PurePoint. allows ten, I had space on my link list, and I needed to add PenFed. So I went ahead. Did the usual stuff by answering PurePoint.'s questions to describe the PenFed account. They said they would send two small trial deposits, each less than a buck, following which I would verify. This was commonplace stuff I had done many times before, at PurePoint. and elsewhere. Nothing special. Nothing to see here.
They sent the trial deposits. I saw them in my PenFed account couple of days later. Logged into my PurePoint. account and went through the verification process successfully, whereupon PurePoint. informed me the accounts were linked. Still nothing novel. Routine stuff.
Or not. It was routine until I received notification from PurePoint.'s security/fraud department of a problem. I was instructed to telephone them. I did so without any trepidation because I had done this many times prior, at PurePoint. and elsewhere, and I knew from experience everything was OK.
It wasn’t. Turns out they told me they were unable to confirm my ownership of my PenFed account. I was like: Huh? I verified the trial deposits, didn’t I? They agreed I had done so, but they then politely informed me I had failed their second test. Not realizing such a second test even existed, I was caught flat footed.
Turns out PurePoint. has been experiencing fraud when trial deposits alone are used to verify ACH links. So they contact the linked financial institution in order to “double check” account ownership. It is that second test my link had failed because PurePoint. was, at first, unable to obtain confirmation from PenFed (they did later after making a second try).
Analysis and opinion
I think not all financial institutions are following this “double check” procedure when it comes to verifying ACH links. But knowing about double check helps me understand why those that do limit the number of linked accounts you are allowed. Because such an added level of security comes at a cost.
I’m particularly concerned about Alliant. I seriously doubt Alliant, with unlimited linked accounts, is today using double check. But if one is kicked out of Alliant and forced to go with a new financial institution using double check, setting up many new ACH links there could be problematic.
My opinion is that “double check” of ACH links is today used only by the large banks. But with ACH link verification via trial deposits alone apparently too often leading to fraud, I believe the double check process is likely to spread even to smaller financial institutions.