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#1737988 - 09/05/12 03:05 PM
Unauthorized ACH Transaction on Business Accts
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100 Club
Joined: Oct 2005
Posts: 181
South
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Situation:
I understand on business accounts that have unauthorized ACHs the bank must return these transactions R29 and must be made available to the ODFI no later than the opening of business on the second banking day following the Settlement Date of the original entry.
That said one of our LLP customers has had unauthorized ACH entries on their account with our bank, that are past this deadline, what is our banks liability to this customer, being that it is not a consumer account?
Any help is much appreciated.
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#1737993 - 09/05/12 03:11 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Nov 2004
Posts: 6,712
Illinois
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Since your have no obligation under Reg E, your liability for unauthorized transactions would be governed by state law and your deposit contract with your customer.
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#1738019 - 09/05/12 03:42 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2005
Posts: 181
South
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As far as deposit contract with our customer, would that be Reg E Error Resolution Disclosures that we print on the back of ALL our customers bank statements? Should we not give error resolution disclosures to business customers since they do not actually fall under Reg E? Sorry for so many questions, I no the consumer side pretty well, but as far as all these businesses wanting money back because their computers have been hacked, is driving me insane, where is the sanity in this Regulation, ugh, sorry about the rant!!!!!!!!
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#1738052 - 09/05/12 04:47 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Jun 2009
Posts: 471
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Are the transactions in question fradulent? Depending on the circumstances, I have suceesfully contacted the ODFI on fraudulent entries and been granted permission to return past the deadline.
Under NACHA Rules, there are warranties in place that the entry has been properly authorized by the Receiver (See Section 2.4.1.1(a) of the NACHA Operating rules). Your regional ACH association maybe able to give you some guidance on how to handle a warrenty claim.
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#1738062 - 09/05/12 05:03 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2005
Posts: 181
South
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Yes they are supposedly fradulent. The customer has hired an attorney and wants his money back now!!!!! I am just trying to help uppermanagement to make the right decision, in regards to legal liabilities, we aren't talking about a few hundred dollars, it's more like thousands of dollars.
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#1738086 - 09/05/12 05:44 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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As far as deposit contract with our customer, would that be Reg E Error Resolution Disclosures that we print on the back of ALL our customers bank statements? Should we not give error resolution disclosures to business customers since they do not actually fall under Reg E? Sorry for so many questions, I no the consumer side pretty well, but as far as all these businesses wanting money back because their computers have been hacked, is driving me insane, where is the sanity in this Regulation, ugh, sorry about the rant!!!!!!!! Most banks have this (or similar) verbiage above the error resolution notice on the reverse of statements: "The notice below applies only to accounts of individuals maintained primarily for personal, family or household purposes."
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#1738103 - 09/05/12 06:06 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2005
Posts: 181
South
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Thanks John that's exactly what I needed to no.
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#1738107 - 09/05/12 06:10 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2000
Posts: 40,086
Cape Cod
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BTW, Purex, I've also seen the "disclaimer" considerably shortened to "The notice below applies only to consumer accounts."
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John S. Burnett
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Fighting for Compliance since 1976
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#1738130 - 09/05/12 06:34 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2005
Posts: 181
South
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Great, less sometimes is better. Todays ending up not being that bad after all, you guys are great.
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#1738509 - 09/06/12 05:29 PM
Re: Unauthorized ACH Transaction on Business Accts
Purex
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Joined: Oct 2005
Posts: 181
South
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Yes,I was aware of the SEC codes, if it was a consumer SEC code then that opens my 60 day window, thank God for ACH Bootcamp I attend on a regular basis. But thx tdogz
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