Have an ACH question.

We have a client (sole owner) on account that received two large ACH credits into her account. Both were from tax refund type businesses. Both ACH credits not in owners name.

When questioned, client said she was to get refunds into her account and wire them overseas to her "boyfriend".

I get this is a SAR situation (already filed) but I am having an internal issue with what to do with said funds. Operations side says too late to return, other point of view.. we can. So right now we have a larger sum of money that is just in limbo. We stopped activity...but now what?

Thanks in advance.

rlcarey? I always appreciate your advice!

What do you mean "tax refund" type businesses??

Didn't know if I could put the name in here- Company like Turbo Tax.

Someone filed fake tax returns and credited this person's account. You need to tell this person directly that it would be in their very best interests, since they are now involved in tax fraud, to get their attorney involved to contact the IRS. If she sends the money overseas, she will be aiding and abetting in a Federal crime.

Bank has had multiple conversations with her. She doesn't "get" it. We have placed a block on account for credits and debits. SAR filed, account blocked, no long want to deal with this customer. What is the banks responsibility for these funds? We have frozen her account so she isn't in possession.

I don't think that you have any right to "freeze" her funds. If you are going to continue down this past, it is your legal counsel that should be involved.

Can we return funds?

That may not really be a decision for the bank to make at this point in time. They should have been rejected on day-one due to the name mismatch. But that is why I have suggested that you get your legal counsel involved.

You need to call your attorney.

You can return the funds for mismatch of names. Take a look at the IRS's recent FAQ at https://www.fiscal.treasury.gov/fsservices/gov/pmt/eft/FAQ-IRS-taxr-refund-direct-deposit.pdf

Scroll down to the question starting with "What is an RDFI's obligation when it discovers ...." Although you aren't required to return it, you are encouraged to do so. There's additional interesting info in the FAQ.

I agree John, but that program is about rejecting the ACH. It has nothing to do with returning an ACH a week or ten days down the line, does it??? They credited the customer's account - what right do they have in freezing the account or debiting those funds back at a later time?

Sorry. I re-read my own post and agree that it implies that you can return late. I was thinking of "return" in the sense of "returning" a check unpaid, which needs to be done by your midnight deadline. If your bank had detected the name mismatches while still able to return the credit, that's what you should have done.

But now your best course of action, as Randy has suggested multiple times, is contacting your attorney. And do it swiftly.

Operations suspected fraud when a wire request was put in same day as ACH credit. Their intention was to verify funds and felt wire request was definitely suspicious. I am trying to work with what I have. Frustrating to say the least.

I believe they did, but now I am involved (I believe ) too late.

I am definitely past the midnight deadline. That's my question. What do I do now?

I appreciate all your responses.

BSA Lady - do what Randy and John have suggested (multiple times)...get your Bank's attorney involved ASAP

Contact the ODFI and/or their customer (e.g. TurboTax), then draft a hold harmless agreement among them.