Skip to content

ACH debit goes awry

by John Burnett, BOL Guru


Question: We had a customer come in stating that an ACH debit for her credit card posted to her account for the correct amount when it was scheduled. However, she didn?t receive credit at the other end. They said they didn?t receive it. In looking at the ACH file record, the customer?s account was debited for $700. The customer?s account number was correct.

However, the individual name in the ACH file record didn?t match the customer?s name. Since this is not an error on our part, do Reg E error resolution procedures come in to play? We gave I.D. number and trace number from the record, so that the customer could contact the company and receive proper credit. What do you say?

Answer: Subsection 4.1.4 of the Nacha rules allows a receiving depository financial institution to rely on the account number in an ACH transaction record if the account number and the name of the receiver (if any) in the record do not relate to the same account.

Your responsibility under Regulation E ?205.11 included an investigation of your records, assuming you are not also the receiving party of the transfer. If the information that left your institution was correct, you have satisfied the requirements of the regulation by providing the tracer information to the customer.

There appears to be a problem, however, at your end. You indicate the name in the ACH file record didn?t agree with your customer?s name. It?s very possible that the receiving depository financial institution returned the transfer to you because of the name/account number discrepancy. While Regulation E doesn?t specifically address this sort of situation, I believe that you should work directly with the RDFI to resolve this problem, to the benefit of your mutual customer.

And then, by all means, determine how the discrepancy in name and account number occurred in the first place, and fix that problem.

The original version appeared in the September/October 2004 edition of the Oklahoma Bankers Association Compliance Informer.

First published on BankersOnline.com 4/25/05

First published on 04/25/2005

Filed under: 
Filed under technology as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics