We have a customer who received an ACH debit to his account from XYZ Inc. The customer has disputed the transaction and completed a WSUPP. We returned the ACH as unauthorized. The ODFI has contacted XYZ Inc. and a representative from the company has called and informed us that they have a written authorization for the transaction and can fax it to us so they can get thier money. Does the bank need to get involved here or can we just tell XYZ Inc. that they need to contact our customer directly. Do we need to settle this within the ACH network or can it now be handled outside?

We are being pressured by XYZ Inc. to provide them with the funds. They want to fax us the customer's authorization, ID, etc. to show the ACH was valid. Can we simply respond that we have a WSUPP from our customer and we can provide it to XYZ Inc. and then they'll have to pursue this with the customer (outside of the ACH network)? I'm not sure how to handle this.

From what I understand, once the WSUPP is signed and you have returned the ACH, you are out of the loop. The company needs to take it up with your customer. I would also suggest that the customer, sign a revocation auth, if they no longer want the transaction clearing their acount. Sounds like the company will probably try to send it back through.

Thanks CUgirl. I also would think we'd be out of the loop at this point. Good point about protecting against the company trying to resend.

Did you advise your client that the company can provide a written auth? Perhaps the client forgot or didn't recognize the company name on the ACH description.

Yes we informed the customer that the originator can provide an authorization. He is still denying that he knows anything about the charge or XYZ Inc.

Once the debit has been returned as unauthorized, NACHA rules do not permit it to be re-submitted. It must be handled directly between the Receiver and the Originator.

Can someone point me to a citation that supports this. I have the NACHA rule book, but I can't find anything. I want to have something to back our position if we keep getting pressured.

Start with Operating Rules sections 2.15 and 6.1.7.

Then do a reality check. Ask yourself, "Who is my customer?" and "Do I have any contractual obligation to deal with the Originator?"

The Originator is blowing smoke. You have no need to listen to its whining. Your only obligation to the Originator is to provide a copy of the WSUPP you obtained from your customer in the event that the ODFI asks for it.