Everything ACH

Finally, Part II.  I know you have been waiting – very patiently, I might add.

 So, on to Extended Returns:

Remember in Part I, I mentioned the 24 hour Rule of Thumb?, well, Extended Returns have a much longer return time frame, ergo the ‘Extended’ part.

The RDFI has 60 calendar days from the Settlement Date to return a transaction using one of the Extended Return Reason Codes.  Note that this does not mean that an RDFI can just use these Return Codes willy-nilly.  That is a no-no.

The proper use of Return Reason Codes (all return codes) is one of the many warranties the RDFI maintains; meaning they should only use these codes when it is appropriate to do so.  To do otherwise, could be considered a violation of the ACH Rules – and nobody wants that.

There are only a few of these codes, so let’s review;

R05 – Unauthorized Debit to Consumer Account Using Corporate SEC Code

          This means that the Originator has processed a CCD, CTX or CBR (until IAT becomes active) to a consumer/personal account.

R07 – Authorization Revoked by Customer

           This is when there was an authorization in place, but the consumer (not business) revoked this authorization per the requirements of the authorization.  Remember that most authorizations require verbiage informing the consumer how to revoke it.

R10 – Customer Advises Not Authorized, Notice Not Provided, Improper Source Document, or Amount of Entry Not Accurately Obtained from Source Document

          Customer Advises Not Authorized – the consumer never authorized this transaction, could be they did not authorize a debit from this company, did   not authorize a debit for this amount, or the debit was to post on or after the 15^th of the month and today is the 10^th.  This part covers several possibilities.

           Notice Not Provided – this refers specifically to ARC and BOC transactions    and as we know, ARC and BOC transactions require a notice as part of the authorization process.  The notice must be posted in a clear and conspicuous place.  If it is not, the consumer can claim that Notice was Not Provided.

           Improper Source Document – For all of the check conversion SEC Codes,    there are certain types of checks that are not allowed to be converted.  This Return Reason Code can be used when one of those forbidden types of checks is converted and processed.

           Amount of Entry Not Accurately Obtained from Source Document – I think   you can figure out what this one means.

  R33 – Return of XCK Entry

           XCK Entries are Destroyed Check Entries wherein the check from which the transaction was created has been destroyed or is otherwise unavailable.    These are not very common.

R37 – Source Document Presented for Payment

           This refers specifically to ARC, BOC and POP transactions.  This would be used in the event the Originator processes both the Source Document   (Check) and the electronic transaction.

R38 – Stop Payment on Source Document

           This refers specifically to ARC or BOC transactions.  This would be used in the event a Stop Pay request has been placed on the physical item (Source Document/Check), but the electronic item was presented for payment.

R51 – Item is Ineligible, Notice Not Provided, Signature Not Genuine, Item Altered, or Amount of Entry Not Accurately Obtained from Item

           This refers specifically to RCK transactions.

           Item is Ineligible – The item that was converted to an RCK was not eligible to be converted (see list on page OG 212 of the 2009 ACH Rules Book).

           Notice Not Provided – Same as above – See R10

           Signature Not Genuine – This indicates the signature on the Source Document may be a forgery.

           Item Altered – The Source Document and the electronic transaction do not    match up in some way – amount, account number, routing number, Receiver, etc.

           Amount of Entry Not Accurately Obtained from Item – Same as above  – See R10

R52 – Stop Payment on Item

           This refers specifically to RCK transactions and is used when there is a stop pay order on the physical item (Check/Source Document).

R53 – Item and ACH Entry Presented for Payment

           This refers specifically to RCK transactions and is used when the physical item (Check/Source Document) and the electronic transaction are both presented for payment.

 Whew, there are more than I thought, but still only 9 codes and you will notice, they all have fairly specific uses.

A note:  R05, R07, R10, R37 and R53 all require the Receiver to fill out a Written Statement Under Penalty of Perjury.

 Wow, this post has really been all business.  I won’t let that happen again.

 Anyway, that’s all I have for now.  I know you’re waiting with baited breath for Part III and it will come…soon.

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