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#1972897 - 10/29/14 09:03 PM Late request for return
St Louis Jeff Offline
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Joined: Jun 2007
Posts: 105
We're an ODFI and received a request from an RDFI for a copy of one of our originator's authorization forms for PPD debits. The debits in question were originated by us more than 60 days ago before we got the auth request. The originator complied and we sent the signed form timely to the RDFI. The receiver, the RDFI's customer, had also filled out an unauthorized debit form and submitted it saying the originator's name on the auth form isn't his name and the account doesn't belong to that person. So along with the copy of the auth, the RDFI wanted permission to return the debits past the 60 day rules window.

Since then, we've received two more communications from the RDFI wanting to return the debits beyond the 60-day window, and again requesting a copy of the authorization. We feel we already fulfilled our duty by giving the RDFI the authorization form once and have no further obligation under the Rules or ODFI warranty requirements. They're threatening us with a rules violation now, but what rule have we violated? Plus we've fulfilled the warranty requirement of producing a signed authorization given to us by our originator. How would we, or our customer, know if the auth contained incorrect information if they used the instructions as provided?

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#1973127 - 10/30/14 05:04 PM Re: Late request for return St Louis Jeff
BetsyS Offline
Gold Star
Joined: Jun 2009
Posts: 471
Check Article Two Subsection 2.4 "General Warranties of ODFIs of the NACHA Rules". Subsection 2.4.11(a)says: "The entry has been properly authorized by the Originator and the Receiver in accordance with these Rules" The RDFI is telling you the entries were not properly authorized by the account owner. Your warranty extends beyond the 60 day return window.

I suggest you contact your regional Clearing House for assistance. Ours has a great help desk.
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#1973385 - 10/31/14 03:33 PM Re: Late request for return St Louis Jeff
St Louis Jeff Offline
100 Club
Joined: Jun 2007
Posts: 105
I did check with our local RPA and they confirmed what you said. Furthermore, upon closer examination of the "authorization" our originator provided us, it does not meet the standard as defined in the rules of an authorization, so we've approved the RDFI returning the items us R06. And we've put the originator on notice to stop sending these items.

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#1973478 - 10/31/14 06:09 PM Re: Late request for return St Louis Jeff
BetsyS Offline
Gold Star
Joined: Jun 2009
Posts: 471
Thanks for the update!
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Let's start at the very beginning; A very good place to start...

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#1974571 - 11/05/14 10:10 PM Re: Late request for return St Louis Jeff
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
For those observing this thread -- That warranties given by the ODFI do, in fact, outlast the 60-day period. They endure for whatever period state law says they do. But the RDFI in this case can't force the item back after the end of the 60+ day extended return period. So, since the warranty could be enforced later than the 60-day deadline, and the ODFI can see that the authorization was a problem, allowing a late return was the least expensive alternative if there's a potential for the RDFI to sue on the warranty.

And in this case, it's just good business.
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