Why are unauthorized ACH debits typically filtered out by banks?

Unauthorized ACH debits are filtered out by banks primarily to prevent financial loss. When a bank detects a transaction that is unauthorized, it takes proactive measures to block these transactions before they can affect the customer's account. This is crucial because unauthorized debits can lead to significant financial harm for both the account holder and the bank itself. If a bank fails to stop such transactions, it risks liability and reputational damage, as customers expect their financial institutions to safeguard their accounts against fraud.

While enhancing customer service, simplifying transaction processing, and collecting more fees may be considerations in the banking operations, the fundamental reason for filtering unauthorized ACH debits is to protect against financial loss. Ensuring the security of customers' funds is paramount in maintaining trust and reliability in banking services.