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#45135 - 11/22/02 05:23 PM Corporate ACH Return
EllenA Offline
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EllenA
Joined: Nov 2002
Posts: 598
Flushing, NY
I have a customer who noticed a corporate ACH debit on their statement that they never authorized. Our return was refused because it was not timely. How do we get the customers money returned. The bank who refused the return called us and was extremely nasty to the poor manager who took the call. There has to be some kind of recourse. We couldn't find it in the ACH rules. Can someone point me in the right direction?
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#45136 - 11/22/02 05:47 PM Re: Corporate ACH Return
Rubaiyat Offline
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Joined: Jun 2001
Posts: 1,373
Lido Deck
The reason you didn't find information about further recourse in this situation is because there is none within the ACH system. If a corporate return is submitted after the deadline the RDFI may ask the ODFI to accept a late return. The ODFI has the option of accepting it or rejecting it. However, in your case, it sounds like the ODFI is not open to this. So, at this point, the only thing your customer can do is to deal directly with the originator to try to get their money back.
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#45137 - 11/22/02 06:26 PM Re: Corporate ACH Return
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 78,643
Galveston, TX
Well, you're not going to like this answer, but how you get the customer his money back is you have to give it to him under Regulation E. The customer cannot be held liable for a unauthorized EFT even if it was a corporate EFT. As an RFDI, I think that you also have some obligation to notify your customers that these types of transactions have taken place giving the customer an opportunity to return them in a timely manner. I think that you should also look into blocking your consumer accounts from CCD (I believe that's what they are) type of trnasactions. I would obtain a signed affidavit from the customer and then draft a letter to the orginator and ODFI indicating that the bank is prepared to name both in a lawsuit for fraud unless they cough up the money.
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#45138 - 11/22/02 07:29 PM Re: Corporate ACH Return
EllenA Offline
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EllenA
Joined: Nov 2002
Posts: 598
Flushing, NY
Thanks for your responses, our customer is also a corp. We were sending notices out to our customers whenever they receive any ach activity, but that still doesn't allow for timely return (by the time the customer gets it in the mail the deadline has passed. Sounds like this type of payment is open to real fraudulent possibilities.
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#45139 - 11/22/02 08:10 PM Re: Corporate ACH Return
complyguy Offline
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complyguy
Joined: May 2001
Posts: 494
PA
If the ACH debit was to a business account, I don't believe Reg. E applies. 12 CFR 205.3(a) states that it applies to EFTs that authorize a financial institution to debit or credit a consumer's account.

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#45140 - 11/22/02 08:11 PM Re: Corporate ACH Return
rlcarey Offline
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rlcarey
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Galveston, TX
I don't think mailed notices cuts the mustard. Most banks I know fax or e-mail notices daily - depending on the agreement with the receiving customer. It's been a while since I read the NACHA rules, but as a RDFI you may not be meeting your requirements. You should review this, because if a corporate customer gets stung with a big one - you may have some risk if you're not crossing your i's and dotting your t's (so to speak)!!
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#45141 - 11/22/02 08:26 PM Re: Corporate ACH Return
EllenA Offline
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EllenA
Joined: Nov 2002
Posts: 598
Flushing, NY
Do you have to have an agreement with the customer before you accept ACH for them. I thought only the originator had to have an agreement with the sender and the RDFI could accept the ACH without prior approval from their customer. Do you fax or e-mail on every ACH received? Or only on CCD's
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#45142 - 11/22/02 08:29 PM Re: Corporate ACH Return
rlcarey Offline
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rlcarey
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Galveston, TX
Only CCD's, but like I said, it's been a while since I read the NACHA rules and I don't have a copy handy to see what the actual requirements are on the RDFI.
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#45143 - 11/22/02 08:33 PM Re: Corporate ACH Return
EllenA Offline
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EllenA
Joined: Nov 2002
Posts: 598
Flushing, NY
Thank you for your quick answer. I will start notifying the CCD (only) receipients by phone so I don't have any problems going forward.
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#45144 - 11/22/02 08:37 PM Re: Corporate ACH Return
Rubaiyat Offline
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Lido Deck
The ACH Rules do not specify how or to what extent you should notify your corporate receivers of transactions. It only says that there should be an understanding between the RDFI and the receiver of what and how the information will be transmitted. Obviously, mailing the information will not allow an unauthorized transaction to be returned in accordance with the ACH rules. So, that really is not a good option and you will probably be dealing with more and more situations like this if you continue this practice. Whatever you and the receiver agree upon, the rules suggest that a contract or agreement between the receiver and the RDFI may be required to ensure both parties are clear on how the process will work.
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#45145 - 11/22/02 08:47 PM Re: Corporate ACH Return
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
Thanks cwilliams for the clarification - I knew it was something like that.
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#45146 - 11/22/02 08:55 PM Re: Corporate ACH Return
Rubaiyat Offline
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Joined: Jun 2001
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Lido Deck
I just passed my AAP test. Glad I can put some of the information to good use!
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