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#2283415 - 04/14/23 04:23 PM Federal Deposit
kjohnson Offline
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Joined: Feb 2023
Posts: 8
Hi, I have a question on how do we proceed when receiving an ACH Social Security deposit into a charged off account?

In our Deposit Agreement, we do have Right of Set Off verbiage that indicate we do have the right under the law to grant us security interest in the customers deposit account and any other account to use the account funds to pay the debt. In the agreement it doesn't address if we are allowed to off set a charged off account on federal deposits.

If anyone can advise, I would greatly appreciate it.

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#2283416 - 04/14/23 04:26 PM Re: Federal Deposit kjohnson
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
If the account is charged off, then the account is closed and NACHA rules require you to return the ACH deposit, regardless of the originator.
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#2283418 - 04/14/23 05:06 PM Re: Federal Deposit kjohnson
kjohnson Offline
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Joined: Feb 2023
Posts: 8
All right, thank you for your help!

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#2283424 - 04/14/23 06:41 PM Re: Federal Deposit rlcarey
kjohnson Offline
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Joined: Feb 2023
Posts: 8
By chance, can we return it as R23-Credit Entry by receiver?

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#2283427 - 04/14/23 07:21 PM Re: Federal Deposit kjohnson
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RR Sarah
Joined: Mar 2004
Posts: 2,505
Up North
I believe the receiver would be the customer so I don't think that R23 would be appropriate. We always return as account closed (R2).
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#2283466 - 04/17/23 07:14 PM Re: Federal Deposit kjohnson
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
R23 is only used if the credit entry was refused by its intended recipient. For example, maybe the receiver is owned money and has informed the debtor a partial payment will not be accepted, but the debtor tries sending a partial payment regardless.

You have to use R02 -- account closed, if the account number in the ACH record matches a closed account at your bank.
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