FedACH Risk^® RDFI Alert Service

The FedACH Risk RDFI Alert Service provides notice of unusual or noteworthy conditions within a receiving depository financial institution’s (RDFI) incoming FedACH^® Service batches and/or files and/or within the RDFI account holder’s incoming items. The service helps alert the RDFI and/or its account holders' to potential fraud attempts, to significant origination errors, to situations requiring further action and to conditions of interest. View the FedACH Risk Management Services product sheet (PDF) to learn how the RDFI Alert Service fits into the entire suite of FedACH Risk Management Services. Request that we contact you (Off-site) regarding your interest in FedACH Risk Management Services.

Key Features

• Be alerted to specific conditions via informational notifications that do not interfere with the normal flow of transactions
• Target alert notifications to fit specific applications by creating alert criteria based on combinations of up to eight different fields
• Administer the service for multiple routing transit numbers through a single access point by signing up to be a service participation point
• Use the Alert Scan Result screens in the FedLine Web^® Solution to research alert notifications, and to drill down into batches to view item level information and to derive returns
• Receive expanded information from email notifications about batches and items triggering alerts

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How It Works

• The user-friendly service monitors FedACH Services output batches, files and/or items based on alert criteria thresholds you establish in the service
• A choice of ACH field combinations lets you configure alert criteria thresholds to address a variety of information needs. Review definitions below for the available alert criteria field options:
  
  

  ACH Field Name	Description	How it mitigates risk?
  Originating ODFI Identification	ODFI RTN	Identifies batches from a financial institution the RDFI considers as having poor origination practices.
  Company Name	Name assigned by the originator to identify its transactions to the receiver	This name will often not change as an originator or third party moves from ODFI to ODFI. Some problematic originators will move from ODFI to ODFI on a regular basis.
  Company Identification	Alpha numeric identifier generally assigned by the ODFI used to identify an originator	When combined with ODFI RTN, this field provides the most accurate method for identifying a single originator from a particular RTN.
  Standard Entry Class Code	Code used to identify the payment type of a batch	RDFIs can use this field to identify particular payment types that it may perceive to be of greater interest relative to potential risk.
  Company Entry Description	Payment description passed to the receiver’s bank statement	This name will often not change as an originator or third party moves from ODFI to ODFI. Some problematic originators will move from ODFI to ODFI on a regular basis.
  Entry/Addenda Count	The number of transactions and supplemental transaction information contained in a batch	RDFIs can use this field as a gauge for frequency of payments coming from a particular source within a single batch.
  Debit or Credit Dollar Amount	Summarized dollar value of the transactions contained in a batch	As batches are from a single source, the dollar value naturally gives the RDFI a view of its exposure to a particular originator.
  Settlement Date	The date on which a payment settles in the RDFI’s Fed account	Returns can settle in the RDFI’s Fed account at 1 p.m. ET, 5 p.m. ET, and 5:30 p.m. ET on the same day as the transactions are processed. At a significant dollar value, these transactions could impact balances in the RDFI’s Fed account late in the day.

• The service lets you build batch and item-level alert threshold criteria based on combinations of up to eight requirements: ODFI RTN, company/originator name, company ID, SEC code, company entry description, entry/addenda count, debit and/or credit dollar amount and immediate or same day settlement. Select file thresholds based on debit dollar amount, credit dollar amount and/or transaction (item and addenda) count.
• The service compares each outbound file and the batches it contains against the thresholds you have defined and, at the time of each FedACH Service file distribution, sends email alerts to your designated points of contact on any batches or files exceeding your thresholds.
• For item-level criteria, the service compares a designated receiver's items against thresholds at the close of the FedACH Services processing day, and conditions exceeding thresholds generate automatic email notifications to your designated account holder contacts.

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Sample batch- and item-level notification emails

Review illustrations of batch-level and item-level alert emails

• Batch-level (PDF)
• Item-level (PDF)

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Service Benefits

Compliance and risk management

• Use the service to help proactively manage your potential risks as a RDFI
• Strengthen and support your institution's overall risk management strategy
• Alert your institution to potential fraud attempts
• Use a closed account transaction tracker to help fraud and risk managers keep an eye on activity from possible fraudsters.  Review the Quick Reference Guide (PDF) to see how to create this type of alert
• Identify batches containing unusually large numbers of transactions and addenda, which may indicate possible fraudulent activities such as phishing for valid account numbers.
• Set up alerts to help risk management and fraud monitoring staff watch for potentially fraudulent entries coming in from originators identified on industry watch lists and/or for incoming batches containing SEC codes of interest. Review the Quick Reference Guide (PDF) to see how to create alerts on suspect or problematic originators.
• Prepare to provide health care remittance information by identifying providers receiving electronic health care payments; find out how with Help with Health Care ACH Payments
• Leverage historical reporting features to help address audit and compliance concerns.
• Strengthen your risk management processes by making your institution's ACH receipt more visible to your institution, even if you outsource your FedACH processing or have complex organizational structures.

Operational efficiency

• Gain valuable time for research and action from notifications that arrive throughout the day.
• Act on potential issues earlier to minimize their effect on your institution.
• Use the service to help you retire old ACH receipt RTNs.  The Quick Reference Guide (PDF) shows you how to set up and review alerts associated with remaining activity.
• Improve time-consuming and potentially error-prone manual monitoring processes.
• Initiate research or due diligence based on notification of incoming conditions such as batches containing IAT items or batches of unusually large size.
• Use a closed account transaction tracker to help ACH operations staff notify customers of potentially valid transactions that may require attention as the receiver account has been closed.  Review the Quick Reference Guide (PDF) to see how to create this type of alert.
• Prepare for situations that could impact your institution's reserve account, such as late-day returns, by setting criteria to alert on batches with high-dollar values
• Use debit and/or credit dollar thresholds set at the batch level to help alert your institution to significant origination errors such as extra zeros or similar keying mistakes.
• Set up criteria to alert on incoming batches from potentially problematic originators with recurring quality issues to help ACH operations staff prepare to validate transactions as quickly as possible. Review the Quick Reference Guide (PDF) to see how to create this type of alert.
• Employ the drill down capabilities of research screens designed specifically for the RDFI Alert Service to speed and simplify research and resolution efforts.
• Identify all accounts impacted by a fraudulent origination attempt by drilling down into batch detail to see associated accounts.
• Automate customer notifications and eliminate courtesy calls and ad hoc research requests.

Funds management

• Help CFOs guard the institution’s financial position and Fed account by alerting on last minute shifts in balances
• Provide information to help manage funding liquidity
• Help CFOs keep close track of investible funds
• Help monitor the flow of funds within the institution
• Send alerts on activity that could create large fluctuations in the institution’s financial position

Client services

• Provide proactive notifications to key customers as a demonstration of your institution's commitment to customer service.
• Offer business customers an ACH information service and provide them with basic positive pay notifications.  Review the Quick Reference Guide (PDF) to see how to create this type of alert.
• Communicate the arrival of incoming items of interest to key account holders by combining item-level alert thresholds with automatic email notifications.
• Customize the white-branded Corporate Benefits (PDF) to present the value of the FedPayments Reporter and FedACH Risk RDFI Alert services to your corporate clients.
• Notify of the arrival of items such as corporate payments, cash concentration transactions, tax refunds and grant money, for example.
• Proactively help customers protect themselves by setting alert thresholds for conditions such as incoming debit items in excessive dollar amounts, large dollar return items or items with SEC codes of particular concern such as those identifying converted checks.
• Provide alerts to receivers on unwanted, recurring transactions or attempted debits on revoked transactions.
• Reference the service's customer activity reports if fees are to be charged for the provision of reports.

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Service Setup

Using the FedACH Risk Alert Service requires only that your institution has access to the FedLine Web or FedLine Advantage Solution, that your designated staff has access to FedACH Information Services and that you complete and submit Part 6C (PDF), and for more complex processing arrangements, the additional Part 6E, Section A (PDF) or Section B (PDF), of the FedACH Participation Agreement. Then you are ready to set your monitoring criteria and begin putting this valuable monitoring tool to work.

To start using the FedACH Risk RDFI Alert Service, visit the Service Setup page or contact your account executive.

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Access Easy-to-Use Tools

• Quick Reference Guides
• A list of your Federal Reserve Bank contacts, including your FedACH and Check Services Customer Support.

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