AmEx sent a PPD to our Cashier Check account. This is the second time in recent months. One of our customers sent them payment via Cashier Check last year, and now they are trying to send PPDs to that account. The first time we got an ACH, we returned the item as Unauthorized. Now that it has happened a second time and I'm wanting to return it so they won't try to present an ACH on that account number again. We have a stop pay on the account that we put on after the first time this happened. I can return it R08, but I'm afraid that they'll just try again next month. Should we use R03 for a name mismatch (it came in with the customer's name, not ours)? I was also looking at R20, but didn't know if a Cashier Check account would qualify as a non-transaction account.

Is there anything in the regs that would prevent us from blocking all ACH items to the Cashier Check account (if our core has that functionality)?

We left a message for the customer to call us about this situation, but we suspect they are past due on their AmEx account and won't be in a hurry to contact them to correct the info.

R03 would be OK, if you can get it out the door on a next-day basis. Technically, that should stop Amex from using the account number again, but there's a tendency for new faces at larger companies to look back over past activity looking for account numbers related to a problem account, so it can pop up again.

R08 is technically a one-time stop. So it won't have any effect on subsequent attempts.

R29 is a valid return code (2 banking day limit) for business unauthorized transactions.

At the end of your efforts, you may have to resort to contacting Amex directly by phone, or the RDFI involved to threaten the "two-by-four up-side the head" of a rules violation. AmEx clearly cannot legally infer an authorization from the submission of a cashier's check by its customer.

Thank you John.

We have a stop pay on AmEx's CID for that account, so we caught it in time to return it R03. If we don't hear from the customer soon, we were going to try to contact AmEx through the ODFI.

I think any bank that allows direct ACH access to any G/L account is taking a huge risk. Any attempted ACH to a G/L account should always go through a manual posting review process.

rlcarey,

I didn't directly mention it, but to clarify, this is a DDA that our Cashier Checks are written on, not a GL. When the transactions are balanced against the GL, I'm sure it would be found, but we put a stop pay on the DDA so we could catch it before it even posted at all.

I would not allow ACH to post to the CC DDA account either. You only have a very small window to return one of these items and if you miss your window you could be out some big bucks. There is no legitimate ACH transaction that should hit a cashier's check account. They are ineligible for POP conversion.

I found out how to block all ACHs on deposit accounts, so I'm doing that now. Thank you both for the input!