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#1240423 - 08/27/09 06:01 PM HELP! ACH WEB entry on commercial account
Georgia Plum
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I am having a hard time finding my answer in the NACHA rules. We have a commercial business who today notified us of an unauthrozied WEB entry (PAYPAL) on their account which occurred on August 11. Does the 60 day rule apply to commercial accounts the same as consumer accounts for WEB entries?

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#1240549 - 08/27/09 07:30 PM Re: HELP! ACH WEB entry on commercial account
pacar Offline
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Joined: Jul 2007
Posts: 320
Because a WEB entry is a consumer SEC code, the 60 day time frame would apply.

The return periods for ACH hinge on the SEC code. Had this been a CCD, you would be past the return timeframe and would need to jump through some authorization hoops to be able to return it.

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#1240657 - 08/27/09 08:39 PM Re: HELP! ACH WEB entry on commercial account pacar
Georgia Plum
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Thank you, that's what I thought but couldn't totally convince myself.

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#1242208 - 08/31/09 06:11 PM Re: HELP! ACH WEB entry on commercial account
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,844
Pulling people out of the ditc...
WEB should only be used for consumer accounts, not commercial accounts, so I don't believe the above is correct. First, your core should be set that you don't accept consumer SEC codes on commercial accounts. Second, and the bad news, is that I don't think you can return under the "60-day" window, as that is for consumer accounts, and you clearly state this is a commercial account. Return periods don't "hinge" on the SEC code, they are structured on the type of account that is used.

It certainly wouldn't hurt to contact the ODFI and let them know that you received a WEB transaction to a commercial account and ask for permission to return it. If they deny, you can always tell them you'll be filing a rules violation reprot on the transaction. But make sure you also get your core in order so this doesn't happen again.
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#1242244 - 08/31/09 06:58 PM Re: HELP! ACH WEB entry on commercial account HappyGilmore
nelleanor Offline
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Joined: Dec 2008
Posts: 39
We took some training from the Northwest Clearing House Association earlier this year, and according to them a consumer SEC code on a business account is bound by Regulation E standards for returns. So, I would disagree with the previous post saying that the return period doesn't hinge on the SEC code. Also, as the return reason is chosen based on the SEC code, not the type of account, I don't think that there would be any way for the RDFI to communicate to the ODFI that it is a corporate account.

If I am reading my notes correctly, however, it does look like they agree with The Hap!'s comment about it being okay to automatically return on any consumer SECs that hit a corporate account. However, I would think that this could cause issues especially with SEC codes like IAT where there is no corporate option.

-nell

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#1242309 - 08/31/09 07:50 PM Re: HELP! ACH WEB entry on commercial account nelleanor
pacar Offline
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Joined: Jul 2007
Posts: 320
Nell –

Consumer SEC's posting to a corporate account are quite a nuisance, but they happen all of the time. HAP is correct - technically, it's a violation of the ACH Rules and you can submit a rules violation if you are really ambitious or return them (good luck finding an applicable return reason code). But most banks don't bother since you have a greater right of return with the consumer SEC codes and it works out better for your business customers when the originators mess up and use the wrong SEC for a business account.

The ACH Rules provide the return timeframes and reason codes for each SEC. Since WEB is a consumer code, R10 applies so you have 60 days via the network (you can go longer than that for a breach of warranty claim).

The bigger issue is how to handle the required WSUPP form to do the R10 return. The WSUPP form is strictly for consumers, so you have to get a bit creative when a consumer SEC hits a business account. The good thing is the WSUPP form in the rules book is a recommended format, not a required one. So you can modify the form as you and counsel see fit, as long as it contains all the required statements. We've done this successfully in the past without issue.

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