What is the primary purpose of an ACH filter?

• A. It enables account holders to provide criteria to filter ACH debits
• B. It is a tool used by auditors to examine electronic payment activity on bank records
• C. It requires the bank to contact the account holder before any payments are made
• D. It matches the details of incoming payments with those on a list of expected payments provided by the account holder

Answer: (A)

An ACH filter is about giving the account holder control over which ACH debits are allowed to post to the account. By setting criteria—such as specific vendors, a range of allowed amounts, or other transaction attributes—the system can block or flag debits that don’t match the rules. This helps prevent unauthorized withdrawals and reduces fraud risk, while letting legitimate transactions pass.

The other ideas describe different concepts. Using a tool for auditors to examine electronic payment activity is about reviewing history rather than controlling what can post. Requiring the bank to contact the customer before payments adds a notification/authorization step, not a filtering mechanism. Matching incoming payments to a list of expected payments resembles a verification process like positive pay rather than filtering by criteria to permit or deny debits.