This is a situation I came across in my ACH audit: A customer has an account under his DBA name. The majority of items in the account are for the business. An ACH item is returned with reason R05 - Unauthorized Debit to Consumer Account Using Corporate SEC Code. My finding is that this is improper, since the ACH Rules definition of a consumer account states that it is "...primarily for personal, family, or household use and not for commercial purposes."

Management's response is that this is not a corporation, so this cannot be a corporate account. I don't see a definition of a corporate account in the Rules. Comments anyone?

The problem with DBA accounts is that, very frequently, they are mixing business with pleasure. I, too, have encountered this and consulted our regional payments association. Thier recommendation was to determine the extent the the account is used for business purposes, and how much is personal. If it's primarilly a business use account, your finding would be correct and the entry would be improper. If, however, it's used for mostly personal expenses, the return code of R05 would be fine.

Does it make any difference whether the ACH item is for business? In this case, it was a CCD entry that was clearly a business item.