Nacha's Updated Written Statement of Unauthorized Debit: Should You Update Your WSUD Forms?

11/21/2023 - By Sallie O'Brien AAP, APRP

Consumer fraud has become a growing concern, particularly concerning financial transactions and investments. In light of recent fraud trends, including high-profile cryptocurrency fraud cases, Nacha has recognized the need to address the risks associated with false claims of unauthorized ACH debits. To protect consumers and educate them about the potential consequences of making such claims, Nacha has updated its sample Written Statement of Unauthorized Debit (WSUD) to include language outlining the penalties for misrepresentation.

Recognizing the Issue

The updated WSUD is a response to consumers who, after authorizing ACH debits to transfer funds to investment accounts or cryptocurrency wallets, later attempt to recover their lost investments by falsely claiming that the debits were unauthorized. Unfortunately, some individuals have received advice, often found online, suggesting this course of action. However, making false claims of unauthorized transactions can be considered bank fraud, leading to civil liabilities or even criminal penalties.

Nacha's Approach

Recognizing the need to protect consumers from unknowingly violating federal laws, Nacha aims to raise awareness and prevent fraud. Nacha has revised its sample form WSUD to include a clear disclosure similar to those found on other widely used banking forms. By doing so, Nacha intends to inform consumers of the potential penalties they may face if they make false representations to their financial institutions.

Impact and Recommendations

Nacha advises financial institutions to consider including similar language on the forms they use to further educate consumers about the risks of making false claims. By providing this information upfront, Nacha hopes to prevent individuals from unintentionally committing fraud based on misguided advice they may have received.

Nacha's updated sample form WSUD now includes the following language:

"Any intentional attempt to obtain money from a financial institution by misrepresenting whether a transaction was authorized may result in the imposition of fines up to $1,000,000, or imprisonment up to 30 years, or both under the provisions of Federal law (18 U.S.C. §1344)."

As consumer fraud continues to be a significant concern, Nacha is taking proactive steps to update the sample Written Statement of Unauthorized Debit. By including language that clearly informs consumers of potential penalties, this update aims to protect both consumers and financial institutions. It is crucial for consumers to be aware of the legal consequences associated with misrepresenting unauthorized transactions, ultimately fostering a safer financial environment for all parties involved.

Questions?

Reach out to our Financial Institution Advisory Group for more information about Nacha’s Written Statement of Unauthorized Debit.

About the Author | Sallie O’Brien AAP, APRP

Sallie is a senior consultant in the Financial Institution Advisory Group at Saltmarsh, Cleaveland & Gund. She has over 20 years of experience working with financial institutions. Sallie specializes in risk-based Nacha compliance audits and provides ACH-consulting services to the firm’s financial institution industry clients. Prior to joining Saltmarsh, Sallie was a senior director of education at a regional consulting firm where she provided payment education and Nacha compliance programming for third-party providers.