Question: The customer’s account is closed. An ACH came in but was returned late. What can the bank do?
The bank was at fault for the late return. Because the bank was at fault, should it be written off as a loss?
Answer: If you have missed an ACH return deadline, you can still arrange with a cooperative originator to
return the item, the rules notwithstanding. Even if you are unable to convince the originator to “take the
hit” on the transaction, you might be able to collect from your customer even if the account is closed. If
the transaction would otherwise have been legitimate (but for the account’s being closed), the customer
presumably received a benefit. Only after reviewing the situation for the potential of collection should
you charge the item off.
The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.
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