What you need to know about e-Transfer and Autodeposit fraud

In honour of Fraud Prevention Month this March, PPJV wants to share insights about e-Transfer Autodeposit fraud. Recently, there have been reports of Interac e-Transfer Autodeposit scams – below find some additional details to help educate yourself about Autodeposit and how to avoid fraud when using it.

What is Autodeposit?

Interac e-Transfer’s Autodeposit function is a feature that you can enable through your financial institution. Once you have set it up and defined which account you want to use to receive your transfers, all e-Transfers you receive will be automatically deposited into your account following routine fraud checks by your financial institution, without any additional steps such as receiving an email or text or answering a security question.

How does Autodeposit work?

When someone sends money using the Interac e-Transfer service, the money never actually travels by email or text message – only notifications and deposit instructions do. As with most money transfers, the sender’s and recipient’s financial institutions transfer the funds using established and secure banking procedures.

The Autodeposit feature works by allowing the consumer or “recipient” of the funds to register and connect their email address or phone number to a specific bank account in advance, providing an added layer of validation between the sender and the receiver.

Once Autodeposit is enabled, the sender of an Interac e-Transfer knows who is receiving the funds (and the account they are going to be deposited in) prior to sending.

Are Autodeposit transactions instant?

Autodeposit transactions are considered near real-time as they go through this pre-authentication step by both the sender’s financial institution and the recipient’s financial institution in advance of the transfer.

Autodeposit eliminates the security question-and-answer step for every transaction. However, as with all transfers, that additional fraud checks occur in the background by both the sending and receiving financial institutions as part of their standard processes. In some cases, a transaction may be completed faster due to the previous history of transactions between a sender and the recipient or other parameters set up by the financial institution.

The financial institution sets the dollar amount and fraud delay thresholds on all transactions their customers send to mitigate fraud risk. These are determined by a financial institution’s risk tolerance or by previously established history between the sender and recipient.

Only when the recipient of the funds receives an Interac e-Transfer Autodeposit notification should an e-Transfer transaction be considered complete.

Does Autodeposit protect against fraud?

Autodeposit can help protect you from email fraud, which is a very common type of fraud where criminals gain access to email accounts in order to collect personal information and intercept messages such as e-Transfer emails.

Fraudsters often try to exploit weaknesses in email security to gain access to your email account and attempt phishing scams or other cyber attacks. If the criminal does gain access to your email, they may be able to intercept your e-Transfer message, guess (or find) the answer to your security questions and redirect the funds. Suppose you use Autodeposit to bypass the email step of a transfer. In that case, fraudsters who gain access to your email account can’t intercept the message and therefore can’t intercept the funds, as transfers will be automatically deposited in your account following routine fraud checks by your financial institution, without any additional steps.

However, e-Transfer fraud is not completely prevented with Autodeposit.

Confirm your Autodeposits

When buying or selling anything, especially from a person you don’t know, the receiver of the funds should always confirm that they have received an Interac e-Transfer Autodeposit notification that funds have been successfully deposited into their account before parting with the goods they are selling. This will ensure the funds have been deposited. For example, a fraudster could pretend to transfer funds and show a fake confirmation screen, or could immediately cancel the transfer or not complete the transaction, and claim the funds have been sent. A confirmation to the recipient that the funds have been deposited from Interac or their financial institution is the only proof that the funds have been legitimately transferred.

For many different security reasons, consumers should avoid entering personal information into a device that is not their own.