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#2048873 - 11/09/15 09:47 PM Reg. E Dispute - NSF Account
lcc Offline
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Joined: Oct 2012
Posts: 127
Scenario: Customer authorized an ACH recurring draft from their checking account, but when the debit comes in to post, the checking account is NSF, so the Bank reposted the debit to one of the customer's other open and in good standing checking accounts. If the customer disputes this, can we deny it, since we had authorization, it just wasn't from that particular account?

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#2048894 - 11/09/15 11:15 PM Re: Reg. E Dispute - NSF Account lcc
rlcarey Online
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rlcarey
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Galveston, TX
Sounds like someone at the bank is really trying to get the bank either sued or cited for a UDAAP.

You have no authority to take such an action - period.
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#2048942 - 11/10/15 03:08 PM Re: Reg. E Dispute - NSF Account lcc
HappyGilmore Offline
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Pulling people out of the ditc...
To put another way, if the ACH item is for account #12345, and #12345 is NSF, your choices are 1) return as NSF, or 2) pay into further OD. Transferring to another account the customer owns is not an option via either NACHA Operating Rules or Reg E.

And if the customer disputes, you can't deny - you have no legal basis for doing so.

Now, I would guess that someone in your back office may think this is "a great customer service they are providing" by ensuring that a recurring item is not returned, But you have no legal basis for doing this, so you should be aware of the risks associated and really should make sure it discontinues if this is a normal practice.
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#2048978 - 11/10/15 04:08 PM Re: Reg. E Dispute - NSF Account lcc
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
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Central City, NE
I've never heard of anyone doing this before. Randy and Happy are correct. You say "since we had authorization". No you don't!
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#2049225 - 11/11/15 08:04 PM Re: Reg. E Dispute - NSF Account lcc
New Day Offline
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Joined: Dec 2011
Posts: 139
Are they thinking they have right of offset? If that's the case, shouldn't the ACH item post and then according to their terms and agreements offset the overdraft if it isn't covered?

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#2049301 - 11/12/15 04:33 PM Re: Reg. E Dispute - NSF Account New Day
John Burnett Offline
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John Burnett
Joined: Oct 2000
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Cape Cod
Originally Posted By Timeline
Are they thinking they have right of offset? If that's the case, shouldn't the ACH item post and then according to their terms and agreements offset the overdraft if it isn't covered?
That would be a better way to handle it, assuming there is common ownership between the accounts.
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