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#2206320 - 02/15/19 03:42 PM Unauthorized Preauthorized ACH Transaction
Half Pint Offline
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Joined: Sep 2012
Posts: 76
Pennsylvania
Can a customer dispute unauthorized preauthorized ACH transactions that were occurring since 2013 but just recently brought this to our attention last month?

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#2206321 - 02/15/19 03:46 PM Re: Unauthorized Preauthorized ACH Transaction Half Pint
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,622
Galveston, TX
Sure - the ones that occurred within 60 days of the statement that had the original charge on it.
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#2206340 - 02/15/19 05:01 PM Re: Unauthorized Preauthorized ACH Transaction Half Pint
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,528
Pulling people out of the ditc...
there are 2 paths here. Randy mentioned the one related to NACHA processes, and he is correct for ones within the past 60-days of the most recent statement. Under Reg E, you may have different processes to follow regarding an investigation and claim process, depending on what your investigation shows.
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#2206343 - 02/15/19 05:16 PM Re: Unauthorized Preauthorized ACH Transaction Half Pint
Half Pint Offline
Member
Joined: Sep 2012
Posts: 76
Pennsylvania
Thanks!

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#2206357 - 02/15/19 05:46 PM Re: Unauthorized Preauthorized ACH Transaction Half Pint
BrianC Online
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BrianC
Joined: Nov 2004
Posts: 6,310
Illinois
Randy's comments are based on 1005.6(b)(3) which assigns liability to the bank for the timeframe between the original charge in 2013 to 60 days after the bank sent the statement in 2013 that had the original charge. The customer would be liable for all transactions after that date.

NACHA only allows you to return transactions from the present going back 60 days and we cannot use recoveries of later transactions to offset losses the bank may incur under the early transactions.

We have some options. 1005.11 notes that the investigation procedures are not applicable because the customer did not provide timely notice, but we must still abide by liability limits of 1005.6. Since 1005.11 does not apply, we do not have to provide provisional credit or complete our investigation in 45 days.

We have 2 options.

1. If the dollar amount is small enough, reimburse the customer and be done with it.
2. Contact the ODFI and request a copy of the authorization their originator obtained to see if we can conclude that our customer authorized the recurring charges. We with either be able to use this information to deny the claim or we end up reimbursing the customer anyway. Since we don't have to worry about crediting the customer until we make a determination, we can take our time and work with the ODFI to see what we can find out.
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